National Assembly Question Time-STC to open and run its own shops |22 May 2013

“To begin with, the STC plans to open an outlet at Anse Royale, on Praslin and on La Digue,” Finance, Trade and Investment  Minister Pierre Laporte informed the National Assembly during question Time yesterday morning. Yesterday’s National Assembly session was the first for the second semester.

He noted that more details on the new measures being finalised by the STC will be announced in the coming weeks.

Minister Laporte gave this information while answering a question by elected member for Grand Anse Praslin Marc Volcere. He had asked Mr Laporte to explain his ministry’s role in ensuring that the STC’s franchise stores are not overcharging consumers for commodities they sell.

Mr Laporte reminded the Assembly that as there is no longer any control on prices since the economy has been liberalised, and therefore merchants can sell their goods at whatever prices they decide and the STC cannot dictate prices to them as this would be in contravention of fair trading principles and regulations.

As there is a need to address various concerns raised on that matter by members of the public and the   Assembly that there are merchants who are charging consumers excessive amounts above the prices they originally bought the commodities from the STC, the Finance, Trade and Investment ministry and STC have started discussions on propositions for the STC to have its own regional selling outlets to bring commodities closer to the people in the communities and in doing so reduce costs of goods to consumers.

Mr Laporte pointed out it is sad that on Praslin and La Digue even though the company is bearing all transportation and storage costs, merchants are still charging more than the prices recommended by the company.

In a supplementary question Mr Volcere wanted to know more about the benefits accrued by those merchants who are selling goods bought from STC as many consumers prefer to shop in these outlets which have signboards to clearly indicate they are franchises of STC thinking they will be subjected to more favourable prices.

Mr Laporte stressed that benefits to the merchants are substantial as all transportation and storage costs on all goods purchased from STC are absorbed by the company which is not the case if they buy from private importers and suppliers.

He added that with economic liberalisation and wider access to foreign currencies, the STC is losing out through the franchise system and the company has started an exercise to review its franchise agreements with the aim of gradually having and operating its own outlets.

He answered a question regarding the possible existence of cartels among merchants and what the authorities are planning to do to break it down and also means and ways being considered to reduce prices of commodities on La Digue.

With regard to cartels he noted that there are regulations in place through the Fair Trading Commission (FTC) to address such issues.

“The important thing is for the FTC to step up its effort in this regard and to deal severely with any merchants found dealing in such practice and should not hesitate to prosecute them should any evidence be found,” added Mr Laporte.

As to means and ways being considered to reduce the prices of merchandise on Praslin and La Digue, he insisted that the prices should not at all be different from those on Mahe as the merchants’ arguments of high transportation costs are unfounded. But he noted that in the absence of a possibility to force them to keep the prices down, having STC on the ground to operate its franchise is the best way to maintain affordability in prices.

Meanwhile, Minister Laporte has said that the STC is in the process of reviewing its procurement sources and suppliers for the benefit of our economy and with the aim of obtaining better quality goods at affordable prices to benefit consumers.