Manufacturers oppose price control Bill

By Kenfrey Kiberenge

A proponent of a Bill seeking to reduce food prices has exuded confidence MPs will support it once the House resumes next month.

Mathira MP Ephraim Maina says going by the events earlier this year, when the prices of maize flour skyrocketed, the MPs will be duty-bound to support the Bill.

But the same Bill has drawn angry reactions from stakeholders who term it biased. Kenya Association of Manufacturers (KAM) Chief Executive Betty Maina said the law does not consider the entire chain of production.

"You cannot control the end product in isolation, you must consider the prices of inputs, which mainly dictate the price of the end product," she said.

The Price Control (Essential Goods) Bill 2009 allows the Minister of Finance to fix maximum prices for essential products such as maize, maize flour, wheat, wheat flour, rice, cooking fat and oil, sugar, paraffin, diesel and petrol. The Bill reads in part: "The Minister for Finance shall, by order, fix the maximum retail and wholesale prices."

But the MP says once enacted, the law will protect Kenyans against exploitation by unscrupulous businessmen and manufacturers.

Artificial shortage

"It will be the duty of the manufacturers now to demonstrate to the Finance Minister and the entire country why they feel their high prices are justified," said Maina.

The KAM boss says they would engage the august House to ensure the final law will not be unfair to the association members.

The Bill could be popular with MPs as a result of the happenings earlier this year, which saw the price of flour shoot up to between Sh75 and Sh80 from Sh40 in two months.

Should the Bill be adopted in its current form, the Finance Minister would be at liberty to set different prices for different parts of the country.

"Prices will differ from one region to another because we have to factor in the operational costs such as transport," says the MP.

The Bill proposes penalties for people who will sell or buy goods above the stipulated prize.

"A person who purchases or offers to purchase any price-controlled goods at a price or charge which exceeds the maximum price for the goods, or who pays or offers to pay for any price-controlled service a charge which exceeds the maximum service charge fixed, commits an offence," it reads in part.

In addition, time is running out for businessmen who allegedly hoard goods to create ‘artificial shortage’ and later sell them at exorbitant prices, as the new law seeks to rein in such practices.

Kenyans will definitely be delighted if the Government controls fuel prices. However, they will be watching how the events unfold since the Government has had several false starts at controlling prices in the era of free market.