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Subsidies Revisions: 7 Basic Products Affected

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It is a decision that will give a large part of the population a break. The government has decided to increase the subsidies to restore the purchasing power of consumers. As announced by Pravind Jugnauth during the last parliamentary session on Tuesday 26, the prices of 15 of the most consumed medicines will be reduced very soon.

Staple foods at lower prices

The population will be able to eat without constantly thinking about prices. The reduction of foodstuffs will take effect on Saturday 30 April. Subsidies on canned fish are increased from Rs 2 to Rs 3 per unit, canned sweet potatoes from Rs 6 to Rs 10 per unit, cheese from Rs 5 to Rs 8 per 250 grams, edible oil from Rs 28 to Rs 38 per litre, margarine from Rs 10 to Rs 20 per 500 grams. Subsidies on milk powder are increased by Rs 11, i.e. from Rs 30 to Rs 41 per kilo and on dry grains by Rs 3, i.e. from Rs 5 to Rs 8 per 500 grams. This part concerns black lentils, red lentils, large peas, dholl grams and dholl peas.

The Ministry of Commerce is clear that these seven products will have to be sold at the same price as stipulated in the Consumer Protection (Maximum Price of Essential Goods) Regulations 2021 (GN 162 of 2021) and the Rodrigues Consumer Protection (Maximum Price of Essential Goods) Regulations 2021. Actions will be taken against non-compliant importers and resellers.

Popular pharmaceutical products at cheaper price

The pill will be smoother to swallow as the cuts will soon apply to medicines. Last Tuesday, the Prime Minister announced in the Chamber that the prices of 15 drugs widely consumed by Mauritians will be reduced. This is an urgent measure. The Ministry of Commerce is working on the revision of the profit margin of 35% of wholesalers and pharmacists which will be revised downwards. A technical committee is already studying the issue. The list of affected drugs is not yet established but Voltaren, Panadol, Doliprane, Fervex and Ventolin will be among them. Soodesh Callichurn said: “We have not yet completed the list, as we are still waiting for data from the Ministry of Health. However, we expect to finalise it soon. These drugs are available over the counter, do not require a prescription and are widely used.  So, lowering the fixed mark-up will result in a lower sales price. For example, if a drug is imported at Rs 1000, the selling price will be Rs 1350. This 35% mark-up will include the wholesaler’s and retailer’s profit margin. The big danger, according to the Competition Commission, remains that distributors and retailers will be more inclined to stock more expensive medicines rather than the more affordable ones. But if medicines are more expensive in Mauritius than in other countries, it is because of this fixed profit margin policy.

As a reminder, in order to lower the price of medicines, Xavier Luc Duval had advocated for a “regressive mark-up”, the authorisation of parallel imports of medicines and the use of generic medicines.

Additional subsidy to bakeries purchasing flour directly from the State Trading Corporation

We also learned that the cabinet has agreed to grant additional subsidy to bakeries purchasing flour in 25 kg bags directly from the State Trading Corporation, in order to meet the double objective of maintaining the price of scheduled bread ‘pain maison’ at Rs2.60 while not penalising bakeries for increases in their production costs. Consequently, the bakeries would purchase a 25 kg bag of flour at Rs108.85 instead of Rs155.50.

Click here to see: New Subsidised Prices on Basic Commodities

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