Thursday, 12 February 2015 01:47
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CWE supplier selection system scrapped
No special preferences: Bathiudeen
New system in place next week
In a development affecting Sri Lanka’s wholesale market pricing, the Government removed the grip held on the country’s sole and apex wholesale market entity by a select group of suppliers so that budgetary relief could reach consumers.
The move was applauded by a powerful local retail supplier collective which was excluded from the supply chain.
“It was only last night that I came to know about this limitation faced by our wholesale suppliers. Today we scrapped the previously appointed five-supplier team that undertook to supply the entire country through the CWE (Co-operative Wholesale Establishment – SATHOSA). Instead, we opened the supply chain to a larger number,” Industry and Commerce Minister Rishad Bathiudeen said yesterday.
Minister Bathiudeen and Food Security Minister Gamini Jayawickrama Perera were addressing a gathering of more than 70 top national level, large-scale, wholesale suppliers to the CWE under the Ministry of Industry and Commerce.
The CWE is the main government corporation which intervenes in the control of prices of essential consumer items in the market. The CWE can also import and distribute commodities to stabilise prices. When no reasonable price is offered for local produce, the CWE purchases products directly from producers and distributes them to consumers. The CWE’s pricing mechanism is also the prime shaper of the cost of living in Sri Lanka, sitting at the very heart of retail goods prices of the Lankan consumer market.
All other retailers, including all supermarket chains, determine the shelf prices of goods for sale based on the price list determined by the CWE on a weekly, or sometimes daily, basis after competitive procurement. However, Lankan wholesale suppliers were distressed due to the recent decision to purchase goods from only five suppliers instead of its large pool of 71 registered – and many unregistered – suppliers.
“From now onwards both I and Minister Jayawickrama will work together to make President Maithripala Sirisena’s vision of good governance and transparency prevail in the consumer market,” Minister Bathiudeen declared.
“The relief given by the Interim Budget by Finance Minister Ravi Karunanayake has helped to greatly ease the cost of living of the people. But some retailers have not reduced their prices yet. Today we like to announce a new initiative to control prices by next week, in that to correct this we will bring back a transparent tender system starting next week.
“As committed suppliers to Sri Lanka, please support us in this regard so that we can pass the relief to consumers immediately. Both I and Minister Jayawickrema are ready to speak to you at any time of the day about the issues you face. We are also removing all the intermediary committees for different product sectors since we find that retail prices tend to go out of control,” he added.
“Minister Bathiudeen and I want to implement this together since we believe that it is very important that budgetary relief by our Government reaches consumers. We came to you with a pledge of good governance and we will fulfil this,” Minister Jayawickrema said.
“We also request you to report the daily retail market prices of goods to our operations room directly. We are appointing a committee to review the CWE supplier list. From now onwards, we also want to meet you face-to-face on a monthly basis to address your issues.”
The meeting between essential retail suppliers to the local market and the two Cabinet Ministers took place yesterday at the CWE’s Vauxhall Street head office.
Nihal Seneviratne from the Essential Items Importers Association of Sri Lanka (EIIASL), while addressing the Ministers, said: “Wholesale supplying is highly competitive in Sri Lanka. But now retail prices have gone out of control.” EIIASL supplies more than 90% of imported products wholesale to the country’s retail network.
Treasurer of the SME Industry Association of the Colombo District under the National Chamber of Commerce and a supplier of sweets and confectionaries to SATHOSA, Wimal Fernando added: “Meetings between Cabinet Ministers and market suppliers should be held regularly. In fact the last meeting of this nature was held with Minister Jeyaraj Fernandopulle. This is the first time we have been able to speak to you directly since then.”
