Playing games with COL?

Sathosa does not maintain uniform prices at its outlets
By Hiran Senewiratne
Sathosa, Sri Lanka's biggest supermarket chain now looking for a new investor cum manager, boasts of having the cheapest consumer products in the market but a quick market survey has shown that this is far from the truth.

A Sunday Times FT study last week of prices of a selection of essential food items like vegetables, rice and fish found that this state-owned retailer doesn't even stick to its own published prices.

The survey also revealed that Sathosa prices were even higher in some cases than other supermarket chains while not conforming to a standard price structure within its own chain of supermarkets. “Sathosa and the Commerce Minister Ravi Karunanayake claims to have brought down the rising cost of living but that is not reflected in the prices at the Sathosa outlets,” said an angry Colombo housewife.

Sathosa prices are higher for chicken, brinjal, tomato and cabbage than other places. Sathosa supermarkets at Union Place, Rajagiriya and Jawatte Road in Colombo also have different prices for the same products, confusing consumers, compared to other private supermarket chains which have a standard pricing mechanism.

CWE's Additional General Manager (Retail Marketing) Wimal Jayasekera told the Sunday Times FT that Sathosa buys most of its essential items such as fruits, vegetables and other home needs from a range of suppliers which results in price disparities.

Conceding that some of the vegetables, fruits and meat prices were higher than other private outlets, Jayasekera said they were trying their best to supply products at a cheaper price since it is a government institution.

Sathosa has outsourced some space in its supermarkets to private parties and thus the prices at these outlets are beyond their control and uniform prices cannot be maintained, he added.

Supermarket chains like Cargills Food City and Keells maintain one pricing structure at their outlets.

A Cargills Food City spokesman said their entire system is computerised and standard prices are maintained. “For instance the price of beans at a Colombo outlet and outside Colombo would be the same.”

He also said that most of their essential items were relatively cheaper and higher in quality than other supermarkets. A Keells supermarket spoke-sman said their prices also doesn't differ from outlet to outlet unlike Sathosa. The price survey was carried out at Sathosa outlets and Cargills on January 7 and Keells on January 10.

Meanwhile, while the cost of living soars, the cabinet last week decided to reduce taxes on betting shops and casinos.


A Czech (in) sarong!
By Marisa de Silva
Martin Sprongl, Country Director, Czech Airlines, is not only unique because he's the first country director for the airline sent to Sri Lanka but also due to his self adapted, unique, work attire. Sprongl sits at his desk, wearing a black and white sarong, shirt and a broad grin.

Since arriving last October, the girls in the office presented him with a sarong for Christmas, "so, I decided to try it out."

"The sarong is comfortable and different, I just had to wear it and see how it felt," he adds. "I told my colleagues to join me in wearing the sarong but, they seemed a bit reluctant," says Sprongl.

He had seen a Czech actor in Prague wearing sarong and was completely intrigued by it and thought he must try it out sometime, and now he has.

"I'm so fond of the sarong that I think I'll go back and wear it at home during summer," he says, quite seriously.

The sarong-clad Czech believes it's not the 'done' thing here to wear sarong to work cos' "I've been getting some really strange looks whenever I am in public area."The only problem though, is when it comes to driving and walking as it requires some practice for such activity. This being his first visit to Asia, Sprongl's very impressed with what the country has to offer.


SLT declares 3% interim dividend, applies for tariff hike
Sri Lanka Telecom (SLT) last week announced a three percent interim dividend for the 2002 financial year that will come as a pleasant surprise to the 20,000 or so new shareholders but said another tariff hike was on the cards under its tariff rebalancing option.

The company, which is set to face increased competition with the loss of its monopoly on international calls, announced a net profit of Rs 2.4 billion for the first nine months of the year, up 38 percent from the same period the year before.

SLT Chairman Thilanga Sumathipala attributed the results to increased revenue that followed previous tariff hikes under its tariff rebalancing act, and more business in fixed lines and new economy services such as data communication.

The increased volume of international calls had helped cushion the reduction in rates on overseas calls.

"When we started last year we had 21 million per month in international calls to Sri Lanka," he said. "By November this had increased to 28 million minutes per month, or by over seven million minutes per month, at an average of US cents 20 a minute." SLT expects international traffic to have increased to around 30 million minutes in December.

SLT officials said the company was also taking strong action to prevent so-called "gray traffic" that bypasses the legal gateway and deprives SLT of revenue. Some 1,700 lines bringing in "gray traffic" had been disconnected in the last seven months

Sumathipala also said a better focus on customers and enhanced operational efficiency that improved productivity also helped improve the bottom line.

Sumathipala said he was confident SLT will continue to do well in the face of the competition that is expected as more operators enter the field following liberalization of the telecommunications sector.

Asked if another tariff hike was on the cards, Sumathipala said SLT had applied to the Telecommunications Regulatory Authority for an overall increase of 15 percent in its charges.

The fifth tariff rebalancing option was due under a 1997 government commitment that allows SLT five tariff re-balancing options, he said.


SEC investigations come to a standstill
All investigations by the Securities and Exchange Commission into stock market irregularities have come to a standstill following the fiasco over the probe into alleged insider dealing by SEC chairman Michael Mack and other ex-directors of Aitken Spence.

Market sources said the SEC secretariat had halted its investigations because of the uncertainty caused by the apparent preferential treatment accorded to Mack by allowing him a 'second opinion' about the Attorney General's Department's advice that there was a prima facie case against the accused.

SEC investigators are not proceeding with other inquiries because they are not sure whether the accused in future cases would demand a 'second opinion', sources said.

Legal sources have described as "unprecedented" the market watchdog's decision to seek a second opinion on the advice of the AG's Department in the probe, which covers the sale of Aitken Spence shares in May and June this year by the three former directors of the company and their relatives.

This second opinion, given by a two-member panel which reviewed the SEC's investigation, has now been referred back to the AG's Department.


WB’s Mieko in town
Mieko Nishimizu, World Bank Vice President for South Asia, arrives in Colombo today on a week-long official visit which includes a trip to Jaffna and a meeting with the peace-related Sub-Committee on Immediate Humanitarian and Rehabilitation needs, the bank said.

The senior WB official, who oversees Sri Lanka among other countries, is expected to meet Prime Minister Ranil Wickremesinghe, Finance Minister K.N. Choksy and other officials. Her visit, though planned earlier, comes in the wake of a decision at last week's peace talks by the Sri Lankan government and Tamil rebel negotiators for the bank to act as custodian of donor funds to rebuild the northeast.

Nishimizu is also visiting Hambantota for meetings with officials, women's groups and civil society. In Jaffna, she is scheduled to meet officials and civil society before visiting some developments projects in the Kilinochchi district.


Mega bucks from chilled soft drinks, beer
By Suren Gnanaraj
Concerns have been raised over the differing prices of soft drinks in the market, despite the Consumer Protection Act clearly indicating that aerated water, both chilled and unchilled, should be sold at the marked price.

Hotels, restaurants, and nightclubs have been found to be selling soft drinks worth Rs. 15 at mind-boggling prices ranging from Rs. 60 to 450, with mark ups close to an astonishing 2,900 percent.

The Commissioner of Internal Trade, Janaka Sugathadasa, said that raids were being carried out islandwide to arrest retailers selling soft drinks above the marked price, but admitted that no action had been taken to crack down on up-market service outlets. Hotels, restaurants and pubs have dubbed themselves as service providers and not retailers, in order to be exempt from the consumer protection law, he said.

The argument had no legal basis, but was still a sensitive issue, which would be referred to the Attorney General shortly, for a clarification.

This issue has created a fresh debate on the correct definition of a retailer and a service provider, especially since roadside restaurants with basic facilities could also claim to be service providers. The Consumer Protection Act No. 1 of 1979 states that "Every manufacturer of or trader in aerated their agents shall where they have separate chilled and unchilled prices, mark on or label the container of such aerated water with both the chilled and unchilled prices."

Galadari Hotel Managing Director Chandra Mohotti said that it was impossible for the hotel to meet its overhead expenditure, unless it charged higher prices for its beverages. Asked about the legal provision in the Consumer Protection Act, Mohotti said, "Five-star hotels do not offer consumer protection, and it's not only in Sri Lanka, but it happens the world over."

Unlike the retailer who sells soft drinks over the counter, five-star hotels were bound to provide it on a silver platter, which obviously comes with a special price, he said.

Five-star hotels mainly cater to foreign tourists and investors who were prepared to pay for the services provided by the hotel, he added.

Asked why the same hotel charged a different price for its soft drinks in its nightclub, Mohotti said that outlets that provided entertainment and additional comforts were usually prone to charge exorbitant amounts, mainly due to their heavy maintenance costs.

Chairman of the Fair Trading Commission, Professor A.V.S. Indraratne, said that the new Consumer Affairs Authority Bill, which repeals the Consumer Protection Act No. 1 of 1979, will take effect in two months, and that there would be no change to the provision on aerated water

Asked why the bill did not attempt to bring service providers under the law, Prof. Indraratne said that prices charged by hotels, restaurants and pubs were beyond its control.

"Consumer protection is there to safeguard the average consumer. Those who can afford to patronise hotels and clubs are exclusive consumers, and the law doesn't worry about them," he said.

When quizzed as to whether it meant that the average consumers were not expected to visit hotels or clubs, Prof. Indraratne had no reply.

He admitted that there was no legal provision to govern the prices of service outlets and also said that no measures had even been considered to bring about a standard price structure to control their discretion.

An official from another five-star hotel was unaware of the consumer protection clause on soft drinks and said that it was the industry practice to cover overhead expenditure by charging higher prices on soft drinks.

He said most five-star hotels maintained uniform prices for its soft drinks in order to be socially responsible.

However, Chandra Mohotti denied that claim, saying that prices deferred according to each hotel's cost structure.

Corporate lawyer Dr. Harsha Cabral said the consumer protection law was not enforced properly because Sri Lanka lacked powerful consumer societies to raise such issues and consumer behaviour was extremely weak.

Asked whether the law stipulated that aerated water obtained from machines and sold in plastic cups should also be price marked, Dr. Cabral said that the law hadn't envisaged such a situation when drafted in 1990, which meant that the manufacturer should also price mark the cups that are being sold.


No drought this year: high paddy crop forecast
The Department of Meteorology dispelled fears of a possible drought this year, but said that the months of January leading up to April would be much drier than last year. Deputy Director of weather forecasting G. B. Samarasinghe said the department lacked the sophisticated technology to perform long range forecasting for the entire year, but said that they didn't expect any significant changes in the weather pattern.

He said that until April, the weather would be dry and the southwest monsoon would move in by May.

Meanwhile the Department of Agriculture said that due to favourable weather conditions in the 2002 Yala season and with the current developments in the peace process, crop estimates have shown a considerable increase.

Agriculture Director Kamal Mankotte confirmed that the expected paddy yield for the year would be the highest in 15 years. A maximum of 1.92 million metric tonnes is expected from the 2002/2003 Maha season alone, which will meet the country's rice consumption needs for seven months.

Potato cultivation has also been on the rise after the government imposed tariff barriers. The total potato yield expected in the Maha season is 49,916 metric tonnes.

Mankotte said that agricultural production was likely to improve in comparison to last year, due to increased cultivation in the north and east. He said that a total of 1,300 hectares of land in these areas had been used for paddy cultivation, since the government cease-fire in December 2001.

Mankotte also added that the statistics of the Department of Agriculture could only now be considered as accurate, due to the difficulties in obtaining statistics of produce from the north and east.

 


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