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Discounted prices at Sathosa: Truth vs. reality

18 Dec 2021

  • Promised concessions not available at Sathosa: Consumers and critics
  • Trade Minister pledges additional relief measures
By Maneesha Dullewe  Despite Trade Minister Dr. Bandula Gunawardana’s statement that consumer goods would be available at controlled prices, consumers complain that these items are either out of stock, or unavailable at the government-mandated prices at Sathosa outlets, The Sunday Morning learnt. Addressing a press conference on 11 December, Trade Minister Dr. Bandula Gunawardana said that around 50 essential food items will be supplied to consumers, below the market price, until 31 December through Lanka Sathosa. The Minister said that certain varieties of rice will be provided at a price below Rs. 100, while other consumer goods such as sugar will be sold at Rs. 125 per kg and dhal at Rs. 240 per kg. He also addressed the criticism regarding the previous restrictions placed on purchasing more than 3 kg of rice, and pledged that the public could henceforth purchase 5 kg of any variety of rice during the upcoming festive season. Stumbling blocks in implementation The soaring food and energy prices brought on by pandemic-induced supply chain disruptions has caused most Sri Lankan households to change their consumption patterns, as an onslaught of commodity shortages has continued to make itself felt in the island. As part of the Government’s attempts to conserve its dwindling foreign exchange reserves, imports of essential food items have been restricted, while purchase limits have been imposed to battle impending scarcity.  Under these circumstances, the recent Sathosa-based relief measures have further defined the ongoing economic crisis, with the growing lines in front of Sathosa outlets bearing testament to the people’s struggles with the rising cost of living. Speaking to The Sunday Morning, National Movement for Consumer Rights Protection Chairman Ranjith Vithanage said: “Despite the Trade Minister’s assurances, when consumers go to Sathosa, they are faced with empty shelves. Upon inquiry, many Sathosa branches simply say that the arrival of these goods is imminent. Moreover, they have even imposed restrictions on the quantities that can be purchased, saying they can only give 2 or 3 kg. This is the current situation at the Sathosa outlets.” Vithanage also noted that only certain Sathosa outlets near Colombo have implemented the policy to ease restrictions on the quantity of rice that can be purchased, while generally, even within the Colombo District, there was no evidence of the policy being in operation. In addition to the concerns over price, these essential commodities are also increasingly inaccessible to the ordinary consumer.  Vithanage observed: “It has become extremely difficult to access these goods. Sometimes after waiting in line, we get told that the goods are out of stock. Therefore, even if the consumer were to wait in line following the Minister’s statement, they can’t access the store, so ultimately they have to return despondently after having wasted their time. So we have to say that this arrangement has been unsuccessful.” Vithanage further noted that the general condition of essential commodities in non-Sathosa outlets was similarly unsatisfactory, sharing: “A stock of onions has arrived from Pakistan; however, they are unusable. These are not the onions we are used to. The prices have increased as well. Even with dhal, we can’t find the usual variety, and the prices have also increased. Prices of sugar, dhal, potato, and onion have increased, while simultaneously the quality of these goods has declined.” Vithanage remained critical of the overall trajectory of the Sathosa as an institution, saying: “Although Sathosa exists to provide goods at concessionary prices to the consumer, at present it is under control of a certain businessman who stocks products that they choose in an attempt to popularise these specific goods. However, the ordinary consumer, who goes to Sathosa in search of goods like onions, potatoes, salmon, and sugar, is unable to find these essential goods. Overall, our complaint is that they are attempting to stock Sathosa with goods that aren’t specially required by the consumer, demonstrating that the Sathosa inventory hasn’t been formulated with the consumers in mind. Sathosa has failed to identify the nature of their consumer or said consumer’s needs.” Sathosa: A crumbling edifice? Former Consumer Affairs Authority (CAA) Executive Director Thushan Gunawardena had similarly sceptical reactions to the overall viability of the proposed relief measures offered through Sathosa. He stated: “This has been a practice of Sathosa, where they offer such temporary measures even when they have no capacity for such things. Back then, we used to question the ministers’ decisions to select a few commodities and put them on offer, thereby forcing people to buy things which they didn’t want alongside other essential goods. We were very critical of what they were offering.” He added that indirectly compelling people to purchase certain items was in breach of the CAA Act, and stressed that Sathosa’s present inability to implement the promised relief measures were symptomatic of an operational deficiency where the institution was unable to provide a consistent service across the board. Although acknowledging that the present market prices were influenced by various factors, the former Executive Director also said that haphazard price controls and the failure of the Government and the Trade Ministry to properly address the core issues have contributed to the present state of commodity prices in the market. He said: “I would always support a free market, where there is no price control, but given the circumstances, they need to exert proper control. However, we have seen in the past that most of the price controls have failed. Therefore I think the interventionist policy that the government is adopting is now failing and the natural market forces are taking over.”  He concluded that Sathosa was too inefficient an institution to be used to offer countermeasures against the rising cost of living, especially due to its structural corruption. Govt. promises further relief In response to the criticisms regarding the festive season relief measures, Trade Minister Gunawardana offered: “There is no rice in the market at the price we offer at Sathosa. We offer 1 kg of Nadu at Rs. 99.50, Samba at Rs. 130, brown sugar at Rs. 125, a packet of salt at Rs. 35, and a bar of soap at Rs. 39; therefore when we offer a large amount of goods at such massively reduced prices, it upsets a significant segment of people involved in the market. Then this crowd uses various parties to issue accusations claiming that Sathosa has a shortage of goods.” The Minister claimed that due to the changes at Sathosa recently, its daily turnover is now Rs. 160 million, compared to the Rs. 60 million at the time when he took over his duties, demonstrating the groundless nature of such complaints, since this increased revenue could not be managed with alleged stock shortages.  He asserted that they were thus upholding the challenge of maintaining Sathosa amidst conflicts with a “trade mafia” from the private sector. In addition to the concessions provided at Sathosa outlets, the Minister shared that he would be introducing a new relief package next week, comprising 10 kg Samba rice, 2 kg brown sugar, 200 g Thai sprats, a 450 g packet of noodles, a 100 g packet of tea, as well as two bars of soap, the total cost of which amounted to Rs. 1,998.  He further claimed that this package offered a savings of Rs. 600 compared to the cost of purchasing these goods in the market.


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