Consumer rights: A priority

Cost of living has featured prominently in news bulletins around Europe. Malta was no exception. The impact of the price of oil and food kept putting pressures on families around the continent. Having myself a family that also feels the pinch, I appreciate that inflation is not merely a matter of economics and statistics.

In purely statistical terms, it is important to point out that at 3.3 per cent, Malta's 12-monthly average inflation rate is comparable to the EU average. Only Slovakia, at 3.1 per cent, has recorded a lower rate among the 12 countries that joined the EU with or after Malta. Labour has remarked that new member states have experienced faster wage increases but I do have to point out that their average wages are still substantially lower than ours and, at the same time, such increases were also a result of higher inflation rates exceeding double figures in certain cases.

But statistical comparisons do not relieve us from our daily challenges caused by price increases. This is why the government has not only been reactive to this issue but had already acted proactively, particularly through the measures adopted in last year's budget.

The government is working towards the establishment of an authority that would be responsible for consumer rights, with price monitoring being a main goal. We are looking at options explored in other EU member states in order to come up with a legislative proposal in the near future.

The aim of such an entity is not to have a consumer protection framework but rather to strengthen a structure that is already there.

The Consumer and Competition Division, which falls under the remit of my ministry, has continued to build on the strong price-monitoring regime shared for the past two years between itself and the National Euro Changeover Committee.

The latter's role was not to investigate any kind of abuse but focused on euro conversion related abuse. In the first six months of the year over 12,600 outlets were visited. At the same time, the division made over 1,000 visits to open air markets and to fruit and vegetable hawkers. The results obtained by this price-monitoring exercise are compared with prices of similar products in other EU member states. This is done in order to detect any abnormal increases in price and when such abnormalities result, a further detailed market study takes places to substantiate or refute such suspicions. There were indeed a number of areas where such market studies took place this year, notably with regard to the prices of animal feed and cheese. In these specific cases, the enquiries concluded that the allegations of price abuse were unfounded and the impact of higher imported prices was found to be the principal source of the increases.

On the subject of price monitoring, I must also commend the work being carried out by the working group of the Medicines Committee that has met regularly, eight times since April, in order to investigate medicinal prices by comparing them with prices being charged abroad. This work has resulted in a deduction in the price of about 60 medicines in the last months.

It is important to point out that consumer protection is not limited to protection against price increases.

Abuse of dominant position, collusion between market leaders or misleading advertising also poses significant challenges to a healthy competitive environment. This year, the division has also carried out an exercise among the leading discount supermarkets to establish whether fair practices under the Consumer Affairs Act were being observed.

Inspections revealed that some outlets were quoting recommended retail prices that were different from those agreed upon by importers, wholesalers or agents in a Stability Price Agreement signed with the NECC. About 100 warning letters were sent to a number of supermarkets and discount stores. In three supermarkets it was concluded that the way prices were displayed was misleading to the consumer, giving the impression of substantial discounts.

To address this, the directorate issued a letter instructing these establishments to refrain from using such practices. Such action has eventually resulted in remedy by the businesses involved.

Finally, Malta also hosts its own European Consumer Centre of Malta (ECC), which forms part of the European Consumer Centres network. The underlying objective of the network is to enhance consumer confidence in the internal market.

In the first eight months of the year the ECC handled a total of 170 complaints. It also assisted a number of Maltese consumers to escalate their complaints to disputes and lodge them with equivalent bodies in another member state.

These measures serve as important tools towards a healthier environment for consumers. Certainly, choice is today providing the consumer with the best possible tool to combat abuse and I am convinced that the majority of Maltese retailers and businessmen do appreciate that customer respect fosters business success: the largely successful euro changeover process is ample proof of this. However, we will be vigilant and it is for that reason that we have committed to allocate more resources, financial and human, to ensure a genuinely fair playing field for all, businesses and customers.

Mr Fenech is Minister of Finance, the Economy and Investment.