Will we face an artificial shortage? Panic buying in supermarkets and superettes is a foretaste, since the announcement of the end of subsidies on a list of 7 categories of basic foodstuffs. Traffic jams on the streets and confusion, discontent with rationing in the shelves… The shelves are empty, panic is at its height at the end of this month with the end of subsidies this 30th June.
A 20% to 25% mark-up to come
On Tuesday, June 14, in Parliament, Minister Soodesh Callichurn had said that subsidies on basic commodities, i.e. 234 brands of cheese, oil, dry grains, milk powder, margarine, tomato and canned fish, will not be maintained for the next financial year 2022-2023. And thus, general panic was on!
The government will introduce a mark-up of between 20% and 25% on these seven categories of products, which will no longer be subsidised by the State as from 1st July. Traders should receive the new prices shortly from the Ministry of Commerce. Through this mark-up system, consumers will be spared from paying the full prices. The prices will be fixed and controlled to avoid an increase too high. As a relief, in the last Budget, the government allocated a budget of Rs 500 million to the State Trading Corporation (STC) to import edible oil, milk and dry grains and create competition in the local market.
These 7 categories of products have been under government subsidies since 12 July 2021, which was to end in December 2021, but was extended to June 2022. They concern mainly certain canned products, such as fish and tomatoes, cheese, edible oil, margarine, milk powder and dry grains.
Rationing system – importance and diverging opinions
In the meantime, the shelves are emptying. The lucky ones came out with trolleys full of the same products. Faced with this trend of panic buying, the large retailers even had to introduce the system of limitation per customer on certain products, requiring buyers to take only two or three units of the products in these seven categories. A manager of a large retailer tells us “we follow the company’s orders. This limitation gives everyone a chance and results in slower emptying of the shelves and continuity of stock in our warehouses. The supermarkets are used to this system and have been able to manage better since the last confinements and shortages”.
In another supermarket of a large chain of stores on the island, another manager speaks of unmanageable people: “We have had cases where customers do not want to respect the limits. Fortunately, the security teams are trained. It’s sad that it is the cashiers who take all the frustration of disgruntled customers by this rationing system”.
Something that makes many people grumble, and let’s state it, customers want to get as much as they can for a lower price. A customer in a supermarket in the centre of the central plateau told us his strategy: “My goal is to get as much as I can for less. I’m going to do it even if it means going back and forth and even if it means going around the island’s supermarkets. I started a week ago. Like me, many people are attached to certain brands that have a certain quality that suits us. We want to consume them for as long as possible before we have to fall back on a lesser grade product”. Another customer even said “I prefer myself to the others!”
The situation is less crazy in the northern part of the country. A manager of another large retailer explained to us that “not all customers do panic buying. Maybe, they are more understanding of the situation“.
In the same supermarket, a customer told us that “for me, those who are panic-buying, especially on certain brands, are certainly small, clever or dishonest traders, who will take advantage of the high prices of these products during the month of July. It is good that other supermarkets have introduced this system of rationing for customers. The Ministry of Commerce should set up a team of inspectors to inspect the stocks of small traders!”
