SA consumers hit hard by price rises

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FoodRetail

Independent Newspapers.

A tough year lies ahead for cash-strapped consumers who have been hit with a rise in the interest rate, electricty increases and two fuel price hikes. They will now have the additional burden of food and other commodities costing more as a result of the increase in the fuel price. Picture: David Ritchie.

Fourteen years ago a 750ml bottle of oil cost R4.34. Today, that same bottle costs R17.43 – an increase of more than 300 percent.

Historic food prices since 2000 reflect the shocking reality suffered by South African consumers as prices for the most basic foods, including bread, eggs, flour and milk, have escalated substantially.

Independent consumer activist Ina Wilken said the analysis of food costs during the past 14 years gave one a “clear indication of the huge effect of fuel and electricity prices”.

She predicted a tough year ahead for consumers, with the debt positions of consumers already worsening daily.

Figures from the South African Grain Information Services and Statistics SA showed that some of the most shocking increases were for peanut butter, which cost R6.14 for 400g in January 2000, but now added R22.80 to the grocery bill, and half a dozen eggs, which increased from R2.89 to R10.22.

In just six years, the price of a 500g margarine spread increased from R10.23 in January 2008 to R20.13 last month.

One of the major causes of the increased food prices is the cost of fuel, which historical figures also show has increased dramatically.

In February 2008 a litre of 95 octane unleaded petrol was R7.40. As of Wednesday the price was R13.59 a litre.

Diesel has increased from R7.22 in February 2008 to R12.88 at present.

Wilken urged the Finance Ministry to reassess all the taxes included in the petrol price as the South African consumer could “no longer make ends meet”.

“The fuel and toll price increases as well as electricity hikes have an immediate effect on all commodities, especially basic food prices and health products.

“Consumers are not tolerating their lack of basic rights… the Consumer Protection Act explicitly addresses our basic rights and we now demand it.”

Economist Bonke Dumisa said the food inflation increase was “a concern”.

Apart from fuel, a contributing factor, he said, was that farmers often increased the costs of their goods when they suffered hard times such as drought, but then never decreased prices again when times were good.

Dumisa added that the cost escalations affected the poor more than the average person.

Although price controls should not be implemented again, Dumisa said some means of monitoring food inflation was needed. - The Mercury


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