In a bid to curb abuse at all levels of the market chain, the National Euro Changeover Committee has been holding meetings with the country’s 20 or so importers, and price stability agreements have been signed with two organisations so far.

An NECC spokesman told The Malta Independent that over the past few weeks, the NECC has held one-to-one meetings with almost all importers, and the committee had so far received positive feedback with regard to their willingness to reach terms of agreement by which they will be bound not to increase prices for the sole reason that the country was changing to the single European currency.

On 24 July, the committee’s Euro Observatory signed an agreement with the first organisation that took the initiative, Island Hotels Group, whose owners have agreed to freeze all their food and beverage prices until April 2008, as a clear message to consumers in the run up to the adoption of the euro.

The Price Stability Agreement goes beyond the commitments of the Fair-pricing Agreements In Retailing (FAIR) scheme, to which almost 6,000 businesses are now affiliated.

By means of the agreement signed at the end of July, the NECC will be providing training for all those employed with Island Hotels Group, in order to ensure timely preparedness for the euro.

The Price Stability Agreement is intended as a tool to ensure price transparency, boost consumer confidence and continue promoting fair pricing.

The second organisation that signed the agreement towards the end of July was VJ Salomone (Marketing) Ltd, whose owners agreed to freeze the prices of their Procter & Gamble products between October this year and March next year.

The message that the NECC is trying to put across is that inflation is a reality and something that always happens, the committee spokesman said, adding that neither the NECC, nor the government could oblige importers to freeze their prices in order to gain the trust of consumers, but it was obviously in their interests to do so.

Importers play an extremely important part in the euro changeover process and the NECC is confident that it will not be long before terms of agreement are reached with many of them.

While euro adoption is not in itself meant to cause price inflation, perceived inflation among consumers could be an easy enough trap into which importers and retailers could fall. It is certainly in their best interests to ensure that their products and services are kept at reasonable prices, but it is also very important for consumers to understand that inflation happens all the time for a variety of reasons and with wide-ranging effects.

As an example, one needed only mention the fact that the country’s production of water depended on electricity, the price of which is, in turn, affected by the volatile price of oil. This was just one factor that made people aware of the extent to which the rate of price inflation could be regulated.

In reality, the rate of inflation can be government-regulated only to a certain point. Having said that, however, the NECC wants to urge importers not to rely solely on this fact and to understand their vital role in the changeover process and the fact that they greatly depend on consumer confidence.