Large retailers plan to ratchet up prices as power prices leap
By John Liu ,The China PostTAIPEI, Taiwan -- The Ministry of Economic Affairs (MOEA) yesterday tried to talk retailers of consumer goods into offering discounts to the public but were rejected by some, who said prices must reflect higher electricity costs set to be implemented in October.
September 14, 2013, 12:01 am TWN
Electricity prices are set to increase in October. The MOEA invited representatives from supermarkets, hypermarkets, department stores, and convenience stores for a talk over coffee, in an effort to persuade them not to increase prices on consumer goods.
The meeting was chaired by MOEA Deputy Minister Tu Tzu-chun (杜紫軍). Merchants including Pxmart, MATSUSEI, Carrefour, Rt-Mart, Shin Kong Mitsukoshi, Dayeh Takashimaya and Sogo were among the attendants.
The MOEA requested that merchants set up a designated area for discount products. However, some businesses lashed out, saying that with the government leading the price hike, prices of consumer goods will have to reflect increased costs.
Taiwan Sugar Corporation has agreed to cooperate with the government. Starting yesterday until next Thursday, Taiwan Sugar Healthy Market offers discounts as high as 10 percent to consumers in exchange for reward points.
Carrefour Taiwan's public relation manager Margery Ho (何默真) said that since prices of consumer goods have not yet increased, there is no need to set up a designated area for discounted merchandise. Even if the discounted area is set up, prices of discounted products may still increase in order to reflect higher utility cost, Ho said, adding that prices of consumer goods may start to increase early next year at the earliest.
Cooking Oil and Pastry Prices to Rise
The MOEA also held a meeting with retailers on Thursday. Some attendants said that prices of cooking oil and pastries will rise starting in October, and this increase may be as high as 5 percent.
Rt-Mart public relations office indicated that discounts on a total of sixteen consumer products have been provided to its customers since 2012, although they are not placed together in a designated area.
7-Eleven's public relations office said that starting in 2008, the convenience store has been offering a “everyday discounted merchandise area,” where paper tissues, instant noodles, spring water, etc. are put on sale.
Some retail chain store managers complained that the utility hike will exert substantial impact, as stores have a high demand for electricity to operate lighting, air conditioning, refrigeration and freezer equipments, boilers that provide warm food, coffee machine, etc. Some of this equipment is run 24 hours a day, they said.
MOEA Should Ensure Leveled Prices: Analysts
The MOEA has offered three energy conservation proposals, such as improving lighting and air conditioning and establishing electricity monitor systems, so that retailers may set up tailor-made facilities to conserve energy. The Bureau of Foreign Trade will hold another forum next Tuesday to deliberate issues related to the electricity hike and price stabilization of consumer goods.
Analysts said that the government should ensure merchants do not adjust prices on consumer goods. The reason is that domestic utility prices have long been below the international standard, and it is very rational to increase the electricity price. While the electricity price is set to increase in October, businesses' dependence on electricity is likely to drop as the summer season gradually draws to a close and they are less dependent on air conditioning.
However, once prices of dining-out and consumer goods rise, some of them are not likely to drop again, analysts said.