Dual pricing a 'priceless tool' against abuse

Businesses with nothing to hide should not be concerned about the introduction of dual pricing, the National Euro Changeover Committee has said.

Introducing the display of pricing in both the lira and euro as early as January 2007 was necessary for consumers to familiarise themselves with the new currency, NECC executive director Alan Camilleri told The Times.

The Chamber of Small and Medium Enterprises, the GRTU, has warned that the introduction of dual pricing will cause confusion and added expenses, and has accused the government of making hasty decisions. The Chamber of Commerce in the meantime expressed surprise at the lack of consultation on the introduction date, since many were expecting the system to be introduced in June 2007.

Mr Camilleri believes dual pricing is a necessary tool since it helps consumers and businessmen become accustomed to the new euro amounts and to make comparisons.

In the countries where the euro has been introduced, consumers were sensitive to any hidden price increases and early dual pricing empowered citizens and businesses alike.

In the eurozone countries, dual pricing ran for two years prior to the introduction of the euro cash, while in Slovenia, which is likely to be the only country to enter the eurozone in January, dual pricing started in March.

Prices in lira would have to be converted to the euro at the central parity rate established by the Central Bank when Malta joined the ERM II last year and rounding off should take place to the nearest euro-cent.

Like all eurozone countries, penalties and fines will be imposed on all those who do not observe the conversion rules.

"Our aim is to ensure that the process is low cost and non-inflationary and checks and balances will be put in place both through legislation but more importantly through education, information and direct assistance to both retailers and consumers," Mr Camilleri said.

"Dual pricing is a priceless tool for consumers against rogue traders' price abuse and at the same time provides the best certificate for the absolute majority of traders and business people who operate in an honest and fair way."

Mr Camilleri referred to a survey by the European Commission last November which concluded that 79 per cent of the Maltese were apprehensive about abuses and cheating once the changeover takes place.

In the same survey, 94 per cent said that dual display of prices in shops was essential.

"It is only logical for dual pricing to be introduced early to protect consumers and honest business operators."

Over the coming weeks the government will unveil the Euro Adoption Act which will set the parameters for the euro changeover on January 1, 2008.

The legislation will also ensure that dual pricing is implemented effectively as of January and that the lira price is translated into euros according to the fixed rate.

"Frankly, abuses will not be tolerated, and good practice will be rewarded," Mr Camilleri said.

He explained that the government was also equipping itself with the necessary capacity to ensure that public officials can monitor prices rigorously.

"There is no doubt that the absolute majority of business operators in Malta are honest and operate in a fair way. Only those who intend to abuse during the changeover should be concerned."

With 19 months to E-day, fear has been expressed that the change to the euro will effectively signal an increase in prices. Though the inflation caused by the euro in the first year of its introduction was just 0.3 per cent, people fear it will still impact the prices of basic commodities.

"We are identifying specific commodities that people buy or consume everyday, such as newspapers, coffee, milk and vegetables. The truth, however, remains that the most effective tool to prevent price hikes is the consumers themselves.

"Competition implies choice and consumers are today better placed to exercise their right to choose in buying and pricing. It would therefore be in consumers' interests to get themselves organised professionally during this process in the same manner as the retailers and traders are rightfully well organised," Mr Camilleri said.

The NECC will even embark on a campaign to try and weed out perceived inflation - the inflation that consumers believe has occurred in the recent past, since this will lead to unnecessary hiccups.

Mr Camilleri explained that the NECC was in its final stages of preparations to launch an information campaign targeting both consumers and the business sectors:

"We have recruited a number of information officers who will assist the public, consumers, business operators and the vulnerable groups in the changeover. A three-digit euro helpline is also expected to be launched in the coming weeks."