Same brand of rice, very different prices
TOYDAY ONLINE NEWSBy: Alicia Wong and Ng Jing Yng
YOU could be paying up to 50 per cent more for the same bag of rice depending on where you buy it from, a survey by the Consumers Association of Singapore (Case) has found.
Checking on the regular price — before any discounts — of fragrant rice at supermarkets/hypermarts over May 6 and 7, the consumer watchdog found some huge price differences.
consumer watchdog - CASE, regulation bodies by the government
The biggest disparity was for a 10kg bag of Golden Phoenix Fragrant Rice, which cost $18.80 at Prime but $28 at Sheng Siong.
Among the 5kg packs, Golden Peony Fragrant Rice was $9 at Cold Storage but $12.80 at Prime, Mustafa and Carrefour.In all, 10 brands of fragrant rice were examined across eight randomly-chosen retailers: Carrefour at Plaza Singapura, Cold Storage at Harbourfront Centre, Giant at Vivocity, Mustafa at Little India, NTUC FairPrice at Clementi Central, Prime at Hougang Ave 1, Sheng Siong at Ten Mile Junction and Shop 'N' Save at Toa Payoh Central.
"We were quite surprised by the big differences," said Case's executive director Seah Seng Choon. "But it is the commercial decision of the supermarkets. They have different cost structures, different target customers and ... different locations."
Different supermarkets have different aims and goals. Difference in prices may arise from difference in costs (thus different firms will charge different prices to cover their costs)
Different target customers & different locations - Some supermarkets are located at districts where the residents there are generally richer (eg. Bukit Timah) thus these firms will charge higher prices so as to maximise revenue from these richer residents.
Sheng Siong's managing director Lim Hock Chee, whose Ten Mile Junction outlet had the highest prices for most of the brands surveyed, said perhaps other supermarkets were selling rice from older stock, which would have been cheaper.
"Our stock of rice is new, so we are using the latest prices," he said. "Our stock sells fast because we don't order a lot. We need to keep warehouse space for our house brands."
New stock of rice - Charge prices according to market forces (demand and supply) thus prices of rice at Sheng Shiong is high
Older stock of rice - Costs incurred by other supermarkets when they import older stocks of rice is lower as the costs of rice previously is not so high thus these other supermarkets can afford to sell at lower prices (older stocks - might be considered as inferior goods, thus also lower price)
Its Royal Golden Grain Premium Fragrant Rice retails for $12.30 and its Nang Rum Thai Fragrant Rice for $9.30, for a 5kg bag.
Mr Lim also noted that while Case had listed Sheng Siong as selling a 5kg bag of Golden Phoenix Fragrant Rice at $15, the price was actually $13.20.
Prices at retailers may have changed since the survey was done. For instance, when Today visited Giant yesterday, the regular prices of a 5kg and 10kg bag of Golden Pineapple Fragrant Rice were $10.70 and $21.20, respectively. Case had listed the prices as $9.64 and 19.40.
House brands continue to be cheaper, the survey found. FairPrice Thai Fragrant Rice (5kg) was the cheapest at $6.60, while First Choice Fragrant Rice (5kg) at Shop 'N' Save and Cold Storage was the priciest, at $9.10.
NTUC FairPrice has touted its house brands as being at least 10-per-cent cheaper than comparable national brands. And last week, Today reported how the supermarket, to keep rice prices low, has been advising customers to buy no more than five 10kg bags of rice each.
Demand of rice is high and supply might have been reduced (due to recent diasters in Myanmar and Si Chuan, China ; these countries might concentrate their efforts in diaster relief and not so much on agricultural products)
Thus, consumers should prevent themselves from stock piling bags of rice which will increase speculation that there will be a shortage of rice which will furthur increase the prices of rice.
While consumers were shocked at the huge price differences, those Today spoke to would not change their choice of supermarket.
Housewife Pooja Dutt, 31, gets her rice from Giant as it is convenient. She said: "It is too much a hassle to go elsewhere ... petrol and time still makes up for it at the end."
Would not change their choice of supermarket - customer and brand loyalty thus consumers will still stick to the old brands and supermarkets.
Convenience - thus differences in price may not affect their choice. ("ultimately, the petrol needed to travel makes up the differences in price") (Similar to analogy of bottle of mineral water being more expensive at the mini-mart near one's house compared to that of the bottle at the NTUC Supermarket)
Customer service officer Audrey Koh, 28, said: "The fluctuating prices are so confusing that I don't really keep track anymore. I am surprised such basic staple like rice does not have a fixed price control system."
Fluctuating prices - due to "no fixed price control system", allowing the market forces of demand and supply to set the price of rice
Basic necessity no fixed price control system - No price ceiling (regulation) set by government. As mentioned, it is becasue the government does not "want to interfere with a commercial decision". Nevertheless, the government will still continue to monitor the situation and intervene when necessary to prevent exploitation of consumers and keep the price of good at a level that is affordable to the majority.
But the consumer watchdog will not go beyond surveying prices — Case will not interfere with a commercial decision, Mr Seah said. "We leave it to consumers to decide."
Case will continue to periodically conduct surveys on individual items.
Early this month, it released a survey of the prices of budget items at eight supermarkets.
Source: http://www.todayonline.com/articles/253935.asp
Pang Wei Pin
19 May 2008
posted by frog11152 @ 1:06 AM
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