MANAGING PERCEPTION: His position in the cabinet is certainly not an enviable one, in the current economic and political climate. Since he assumed the post, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainudin has been consistently forced to juggle tough consumer issues that he says has, more often than not, been blown out of proportion or are simply lies. In an interview with Media Prima, Hamzah painstakingly explains to Farrah Naz Karim issues that put his ministry under scrutiny
Q: The spotlight has been very much on your ministry, especially with people grappling with the increasing cost of living.
A: It has to be made clear what exactly comes under my purview. They are essential items, specifically, rice, cooking oil, sugar, liquefied petroleum gas (LPG) and flour. The rest, like canned sardines and petroleum, for instance, do not. Many are confused and link everything about the cost of living to this ministry. Some say the minister is responsible for all this. What is the best way for the people to understand that the cost of living is very much linked to the way we live?
Where housing is concerned, the government is doing all it can to make sure everyone owns a home. We have affordable homes in towns and the suburbs. That is part of reducing their expenses for homes. Utilities, for instance, are very much determined by each household. We must also look into how we can best manage our expenses.
Q: Every time the subsidy for a sector is rationalised, there will be public uproar as the people will be forced to dig deeper into their pockets.
A: We expect the government to provide nothing less in terms of subsidies, but we must also be responsible in balancing and making the best of the infrastructure and subsidies provided by the government. I am responsible for preserving the subsidies for essential items. But at the same time, I do not want to see leakages in the system.
The recent cooking oil issue is an example. The government has been subsidising about 85,000 metric tonnes a month when the census showed that the domestic demand is about half of that. Where did the rest go? It was certainly not meant for industrial use where the output is for export.
Do you know why the subsidised cooking oil is now only sold in packets? Because consumers would have to pay 50 sen extra if it is sold in bottles. We are subsidising the price of cooking oil, which has been seeing a steady increase, otherwise consumers would have to absorb the cost of every bottle. Crude palm oil price is now at RM3,000 per metric tonne and the refinery process to turn it into cooking oil would add another RM200 for that volume. That equals to RM3.20 per kg. That does not include the packaging and trading costs, which add another 60 sen to the price.
If RM3.80 is the cost price to retailers and 10 per cent is the profit margin they expect, the price for end consumers will actually be about RM4.20. If we bottle a kg, it is 50 sen more. That is what it is about. Take RM4.20 and subtract the RM3.50 retail price. That’s RM1.70. Multiply that by the 50,000 metric tonnes we are subsidising. That’s RM85 million a month. Last year, it was RM50 million a month, so who said the subsidy was slashed? That’s almost RM1.7 billion a year.
Q: What about the issue of availability? How do you stop people other than targeted consumers from abusing subsidised cooking oil?
A: I will tell you this. Yes, there was an issue with supply when we first did the restructuring because people were panic-buying and the repackers were struggling with the non-negotiable conditions we set in the interest of consumers.
Now with 50,000 metric tonnes in the market, we do not get complaints of shortage any more. We keep a record of the volume each seller has.
We also increase the supply and quota when the demand is sure to increase, like during festive seasons and the holidays, when people tend to hold events.
We have also acted against 40 hoarders so far.
Q: Consumers have also registered their concern over talks that safeguards currently in place, like those against profiteering, would be done away with.
A: This is the problem with misguided perception. You have to remember, with the general election around the corner, those against the government are bent on creating havoc. We have heard all sorts of lies being spread. Like LPG, was the price hiked as rumoured? No. People were angry, believing it was going to cost RM7 more. Fed up, the ministry lodged a report to find out who was behind it and, lo and behold, the rumour died instantly.
Q: Your ministry will act strongly against profiteers?
A: We are drawing up a holistic set of regulations to address this. It is to, among others, decide on the basis of the allowable profit margin and what or how many sectors are to be covered. What are the models that would be put in place to ensure that it is fair to both consumers and retailers. It is crucial to ensure sellers, too, will be able to sustain their business. It is an exhaustive process. Why would they do business if they can’t profit? But at the same time, I will make sure their profit-making is not at the expense of consumers. That, I am against. Especially when it comes to food products.
Q: There is this trend that, when prices of certain commodities increase, the prices of many consumer products rise. When prices drop, you don’t see things getting cheaper. Will this anti-profiteering regulation that you are formulating tackle this?
A: A study that we are carrying out involves all the variables and the different sectors, including services. We will take into consideration all aspects to keep the domino effect in check.
I have to look into all elements and be fair to both the people and the business community. I must ensure there is a fair balance on both sides. It is also important for me to ensure the growth of the domestic economy. Protecting the interests of both sides must go in tandem.
If the business community pulls out, a shortage of supply will be inevitable and demand will increase, hiking up prices. We need to strive for this balance so that it is comfortable for all.
Q: With the power of social media, how do you manage lies that go viral concerning your ministry?
A: It is a huge problem when everyone wants to be the one to provide so-called “breaking news”. Our enforcers have been told to look closely into this. At the same time, we have initiated the “Friends of KPDNKK” programme, where we empower consumers to be the eyes and ears of the ministry, so that we correct misconceptions and have a better grasp of what is happening on the consumers’ end. We also have our PIGOS (Strategic Operations Centre) unit, which operates 24 hours a day when there are issues. Otherwise, it operates till 10pm.
Q: Many feel that your enforcers are not proactive enough in reining in unscrupulous traders.
A: We have 2,500 enforcement officers. To put things into context, there are 10,000 mamak restaurants. Then, there are the thousands of grocers, and Chinese, Indian and Malay restaurants, just to name a few. When we are talking about those kinds of numbers, it is hard to be visible. That is why I need “Friends of KPDNKK”. I need
consumers to be my friends. The 2,500 enforcement officers will lead these “eyes and ears” on the ground. Unless the ministry has 25,000 enforcers at its disposal, we cannot afford to go on a wild goose chase.
Q: What is the role of your ministry in improving the economy of the people?
A: We have a host of initiatives to help the people weather the uncertainties of the sluggish global economy that is inevitably affecting us as a trading nation. At the same time, we are extending help to consumers through our cooperatives, franchise programmes and initiatives to assist the small and medium industries where their products are brought into hypermarkets. We help in product development, packaging and more.