The first results of the Union Haddiema Maghqudin’ s (UHM) price monitoring exercise has yielded no euro changeover related price hikes, but has instead come up with other interesting results.

Most notably were hikes in the prices of a number of commodities which, rather than being related to Malta’s impending euro changeover, appear to have been catalysed by the international commodities market – particularly with respect to the prices of products using wheat, cereals and milk.

Earlier this year, the UHM was awarded a contract after a tender was issued by the National Euro Changeover Committee to monitor the prices of certain goods and services with a view to establishing abuses in the lead-up to and after Malta’s euro changeover, due to take place on 1 January.

The union’s exercise, which has enlisted a number of mystery shoppers to monitor a basket of 200 price-sensitive items, began in June and will run until May 2008.

Early observations by the UHM’s mystery shoppers have found nationwide increases in certain brands of pasta, which were found to have climbed by 10 to 20 per cent, biscuits, with some brands having risen in price by five to ten per cent, as well as in certain brands of canned tuna, which have risen as high as 10 per cent. One particular brand of beer also registered a marked price increase.

The trend, however, does not appear to boil down to pricing abuse on the part of the local market but rather to cases of imported inflation emerging from overseas markets.

The price of the traditional Maltese loaf had recently fallen victim to international increases in the price of flour, leading to a conflict between the government and bakers. Following a series of negotiations, the loaf’s regulated price was increased by one cent as a means of offsetting additional costs being incurred by bakers.

Throughout its initial investigations, the UHM uncovered two cases of what it described as “somewhat high” price hikes at two particular catering establishments. This and other similar instances are to be reported to a regulatory committee for investigation.

As the Maltese market is liberalised, punitive action against establishments found raising their prices cannot be taken, as they have the right to charge what they like.

Suspected abuses, however, are to be reported to the committee, which, if it has found outright abuse, will proceed with a “naming and shaming” exercise.

The UHM had been commissioned in March 2006 to assess price fluctuations related to Malta’s euro changeover. The exercise – being headed up by John C. Grech, Stefano Mallia and Karl Montfort – had begun in June and will run until May 2008, with the UHM’s team having started early, so as to gauge price fluctuations and trends both before and after Malta’s euro adoption.

Experience from other countries that had undergone the changeover showed it was the small, day-to-day items purchased by families in which the biggest price increases were registered – precisely where the UHM’s assessment exercise has started off.

The UHM formulated a basket of items to be monitored by studying the spending habits of 40 individuals representing a socio-economic cross-section of Maltese society. In total, 200 items are being monitored in the price-gauging exercise.

Malta was divided into four distinct geographical clusters, including Gozo, and the UHM’s mystery shoppers purchased the 200 items from each of the four clusters – resulting in the purchase and receipt collection of 800 items in both June and August.

A total of 140 establishments – from supermarkets to stationeries and from pharmacies to catering outlets – were monitored as part of the bi-monthly exercise.

Speaking yesterday, UHM secretary general Gejtu Vella observed that while the fact that Malta’s liberalised marketplace meant there was really no control over the prices charged for goods or services, some businesses could take the opportunity presented by Malta’s euro changeover to boost their prices.

The possibility of rising prices in the catering and tourism sectors in anticipation of the changeover, he warned, was of particular concern considering the fact that the country’s tourism sector was once again registering improvements.