Cyprus Mail

Government forced to rethink ‘basket of goods’

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The government was on Tuesday forced to rethink its proposal for a ‘basket of goods’ after businesses and MPs gave it the thumbs-down by arguing it may in fact boomerang back on consumers. 

Lawmakers got a first glimpse of a government bill proposing to create an ‘e-basket’ – an electronic platform featuring day-to-day prices of certain goods sold in supermarkets. Its stated intention is to boost price transparency and therefore competition. 

Presenting the bill was Commerce Minister George Papanastasiou, but he got serious pushback from businesses and even from the government’s own competition watchdog. 

Papanastasiou said the ‘e-basket’ would be an online platform where participating supermarkets daily upload their prices on a range of goods. The platform would be updated daily at 8am. 

The products to be listed would be determined via ministerial decree, and mainly concern foodstuffs. Initially the platform would feature some 350 products. 

Participation in the ‘e-basket’ would be mandatory for businesses (supermarkets) with an annual turnover of €2 million and above. 

The minister said the system would include certain safeguards, like filtering out promotional prices which businesses use to draw buyers. 

But the supermarkets association came out against the idea. Charalambos Papantoniou, head of the association, said the ‘basket of goods’ will end up creating unfair competition between big supermarkets and small-to-medium businesses. 

He said small-to-medium supermarkets already have trouble competing with larger outlets. The latter can more easily absorb the knock-on effects from higher electricity and fuel prices, and thus the impact on their operating costs. 

His position was backed by other stakeholders and consumer advocacy groups. Questioning whether the ‘e-basket’ would actually lead to a drop in prices, they advised the government to rework the legislation. 

For its part, the Commission for the Protection of Competition (CPC) argued the measure will in fact backfire on consumers. 

“By creating transparency you also create market distortions, and possibly cartel-like behaviour,” CPC head Antonia Aristodemou said. 

It would encourage concerted practices, as businesses would track their competitors and act accordingly, leading to uniformity in prices. 

Aristodemou also mentioned that in Greece – where a ‘basket of goods’ was applied – the move actually led to an uptick in prices. 

Her comments drew an irate reaction from the commerce minister: “Our culture cannot stand transparency. Some are controlling the market. We are injecting fear so as to cover up for other things. That’s all I have to say about it.” 

Papanastasiou did agree, however, to take into consideration the various views heard. 

Media reports suggested the government may now go back to the drawing board and return with a revised bill. 

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