The Malta Independent 30 September 2023, Saturday
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Chamber of SMEs against price capping

Sabrina Zammit Sunday, 4 June 2023, 09:30 Last update: about 5 months ago

The Chamber of Small and Medium Sized Enterprises is against price capping, CEO Abigail Mamo told The Malta Independent.

Mamo was asked for the chamber’s views in the week that Malta Dairy Products announced an increase in the price of its good, while it was reported in England that the British government is considering establishing a price capping for essential items, including milk.

Inflation has hit Europe, including Malta, in the last 18 months, with prices going up exponentially – both for products and services. Malta’s annual inflation rate was 6.4% in April, easing from 7.1% in the previous month. In April 2022 it was 5.4%, while a year earlier, in April 2021, it was a negligible 0.1%.

A few weeks ago, Central Bank governor Edward Scicluna said that tough decisions may be needed to tackle what he described as the “inflation monster”, saying that “inflation is likely to remain high for too long” when he was speaking at the launch of the Central Bank’s annual report for 2022.

But, unlike what other countries are doing, the government has no intention of establishing a price capping, at least for the basic essentials.

Only this past week – to be precise, on 1 June – Malta Dairy Products Ltd (MDP) adjusted the prices of its fresh milk products so as "to reflect the current significant increases in production and operational costs".

It is the first time in four years that the prices of dairy products have been raised. MDP said that it can no longer absorb the constant increase in production and operational costs.

A one-litre carton of Benna skimmed milk, for example, now costs €1, up from 92c, while the same volume of Benna’s 2.5% fat milk is also priced at €1, up by 6c. Lactose-free milk, in one-litre cartons, now costs €1.25, up from €1.15, while yoghurts and lactose-free yoghurts have all increased by 5c.

In her comments to this media house, Mamo said that the chamber in general does not agree on food price capping as “it is a free market with loads of competition” and it wants it to remain that way.

Asked for her opinion on the prices of dairy products, Mamo said that from the little knowledge she has on how the milk company business works, she said that the company didn’t just choose to increase prices “on a whim”.

She said that Benna would have had to go through several discussions with the government to justify their increase before they could go ahead with it.

Other countries look at the issue of price capping in a different manner.

It was reported last week that the English government is discussing plans for supermarkets to introduce capping on the price of basic food items (like milk and bread) to tackle the constant rise in the cost of living.

The BBC reported that the food prices in England rose by 19.1% from the beginning of the year until April, stating that “it’s the second highest rate in 45 years”.

Quoting the NSO’s Retail’s Price Index for April, Mamo said that inflation went down to 5.8% from 7% in March, an indication that something is possibly changing.

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