Tuesday 21 April 2020


LOCAL retailers importing goods from neighbouring South Africa have been accused of profiteering as their prices have been rapidly increasing in foreign currency terms in recent days.

Ironically, retailers have always called for the use of foreign currency saying it would stabilise prices. However, after Government heeded their request recently, they appear to have continued to increase prices wily nilly.

Before Zimbabwe and South Africa imposed lockdowns to curb the spread of Covid-19, most Zimbabweans frequented Musina in the neighbouring country to buy basic commodities.

Shoppers were claiming that it was cheaper to travel to South Africa and purchase their needs as opposed to buying them locally.
Others depended on cross border transporters who would bring goods from South Africa at a mark-up, though still cheaper than goods in local shops.

With the lockdown, citizens are now confined in the country and forced to buy from local shops, which they say are taking advantage of the situation by overcharging.
An investigation by Chronicle yesterday revealed that major retail shops were in most cases, charging more than double what retailers charge in South Africa.

It was noted that big retailers buy from manufacturers or wholesalers in the neighbouring country and should therefore, like for example retailers in Botswana, be able to put a small mark-up on the price charged by retailers in South Africa and still make huge profit.
The local shops although pricing their goods in local currency, allow clients to pay for goods in foreign currency in line with the Government’s policy.

At TM Pick n Pay and OK Zimbabwe the retail giants are using a ZW$1:US25 cross rate for those intending to buy using foreign currency.
While OK Zimbabwe does not accept payments in rands, TM Pick n Pay accepts the rands payment at a rate of 1: R14,3.

Other retail shops that include Oceans and Greens Supermarkets also accept foreign currency but using higher rates.

Products such as 66 Huggies disposable nappies are being sold for $872 translating to R609 while in South Africa it costs about R379, 500g Kellogg’s cornflakes box costs $139 converted to R97 while in South Africa the same product costs R37.

A 10kg bag of mealie-meal is being sold for R87 in South Africa while locally its going for $287 which translates to R200 after converting using the local cross rates.
One of the mostly imported products, Nan Baby Formula, is going for $889, converted to R778 in the local shops while in South Africa it costs R173.

The same trend occurs for other products including toilet paper where a pack of nine is sold for $180 converted to R125 using local official rate and R48 in South Africa.
A litre of Ceres Fruit Juice is going for $139 converted to R97 while being sold for R22 in the neighbouring country.

Consumer Council of Zimbabwe Matabeleland regional manager Mr Comfort Muchekeza said the consumer protection body has also noted with concern the arbitrary pricing by retailers selling imported goods.

“We have noted the prices here are almost three or four times higher. Even if you factor in transport costs and import duty on all these things prices are still too high. For instance, 2 litres of cooking oil somebody was saying in South Africa it costs R57 and here the same product is $150. Even if we use a black-market rate, you will realise that the difference is still too much,” said Mr Muchekeza.

He said CCZ has engaged manufacturers and Government in trying to assess the value chain causing high product prices and have concluded that retailers are the problem.
Mr Muchekeza said some retailers want to get rich overnight.

“Here and there we might have unscrupulous manufacturers but the major problem lies with our retail, the middlemen. This is more than profiteering, what we can say is that some who are in business do not have ethics required of a business and they would just want operate today and tomorrow they are multi-billionaires,” he said.

Confederation of Zimbabwe Retailers Association (CZRA) president Mr Denford Mutashu said it was normal for prices of imported products to be high.

“It could have been better if we could work with facts and figures but currently, I don’t have those figures. But obviously it may be the issue of costs which they may have encountered. They might have incurred duty because duty on non-essential goods is actually quite high. Essential products like mealie-meal and rice do not carry any duty. So, the issue of transportation cost, duty and extra charges could be the factor. My general comment but I will not think that price would be double of what is being sold in South Africa in any way,” said Mr Mutashu.

“We are comparing selling prices, and they could have factored in the issue of mark-ups in prices that you are looking at in South Africa. The price differentials from our historical study is that a product may carry a 25 to 30 percent differential or more. After factoring transportation in and other cost the prices could be around 40 percent.” Chronicle


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