LETTERS: When consumers have a choice, their choice will be based on the best value for their limited income.
In a free market, suppliers need to compete on prices, quality or better customer service to attract consumers. Consumers' choices ensure market efficiency.
Competition polices, thus, have an impact on the market and benefit millions of consumers.
Also, when monopolies are broken up, there are opportunities for new entrepreneurs to enter the market with innovative products.
Meanwhile, monopolies and cartels can distort prices.
For example, in the food supply chain, monopolies and cartels have been reported to manipulate prices.
The Malaysia Competition Commission's (MyCC) 2019 report on the market review of key food items confirms that one of the reasons for high food prices is distortions and manipulations in the food supply chain.
For instance, the price of ikan kembong increased by six times between the price received by fishermen and the price paid by consumers.
Another example of substantial price increase is the price of cabbage.
The price at the farm is RM1.60 while consumers pay a retail price of RM3.90, an increase of 143 per cent.
The report identified many causes of exorbitant food prices. The reasons include market manipulation by middlemen and multiple intermediaries causing increases in food prices.
So monopolies and cartels cause suffering among consumers while they enjoy exorbitant profits. All consumers, but particularly low- and middle-income consumers, are affected.
MyCC has been conducting studies to determine monopolistic practices, but it's not enough to just study and identify market distortions.
The MyCC and competition law have been entrusted to break up monopolies and establish a free and open market. Only then will consumers benefit.
The Federation of Malaysian Consumers Associations advocates an open and free market on essential foods, medicines and essential services.
We are grateful that Prime Minister Datuk Seri Anwar Ibrahim recognises the sufferings of the people due to the increase in the cost of living, especially those related to food.
He is relooking at monopolistic structures that cause suffering to consumers.
The MyCC must understand its role in ensuring a better quality of life for consumers.
If it fails, consumers suffer. If it succeeds, consumers enjoy lower prices, better quality and wider choices.
What is needed is effective leadership.
Beyond identifying monopolistic practices, MyCC must use the Competition Law and engage with stakeholders to break up monopolies and ensure a free and open market.
The Touch 'n Go saga shows that with political will, the MyCC can act to protect consumers.
DATUK DR PAUL SELVA RAJ
Secretary-general,
Fomca
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times