A consumers’ agenda for 2010 (i)

Consumers have been the pawns in the political game. When one needs to bolster his political ground, consumers top the agenda. This happens in all elections. Unfortunately, soon after the election result is published, the consumers are generally the first to top the line to be faced with austerity measures.

But apart from the political games, consumers face some permanent difficulties. Ideally they should be treated as royalty especially if we are to adopt the maxim ‘The consumer is king’. More pragmatically, what the consumers really crave for is to have a fair deal. The common day experience is much more sober. What can be learned from such experience to draw up an agenda?

The consumer is king when there is a very competitive market. Malta by its very nature is small and though they say that small is beautiful, it is creates a very restrictive market for competition. What can be done?

There are several factors which can be dealt with locally but there are external forces which can really mould the local market. One such thing is e-commerce. One market which during the last few years has been recently influenced by internet is the book market. Mind you, like any other factor the effects can be both positive and negative. The negative side is that we practically finished up with a local monopoly in this sector. On the other side, local book prices have decreased because the local monopolies are facing direct and effective competition from such firms as Play.com. Some years ago, the local price of an imported book marked £5 in the UK usually was Lm5 even though the exchange rate was heavily in favour of the Malta Lira. Today due to the fact that many Maltese are buying their books from internet, prices have decreased substantially.

We can expect similar effects on other markets if e-commerce continues to increase. Unfortunately, such progress brought about a negative response from the local importers. Their economic siege mentality is still strong. One way of preventing e-commerce is through going into franchise agreements. In this way, they prevent e-commerce for the products they import as the foreign internet site will not be available to Maltese consumers.

Such a strategy makes also sense to the mother company as it is able to continue market segmentation in spite of the idea of the Single Market. Through such a strategy, firms would be able to charge different prices to their benefit. As such, such a situation is also worrying to many other consumer groups in the EU and pressure is mounting for some action at EU level. Such a situation is really making a mockery of the idea of a Single European Market.

Fortunately, I believe that local consumer will find an ally at the EU level when John Dalli will take over as Commissioner for Health and Consumer Affairs. In spite of the fact that such an issue does not fall directly under his responsibility, as it falls under DG Market, I am sure that Mr Dalli will use his Office to push for the resolution of such an issue.

I take this opportunity to wish Mr Dalli success in his new Office. I am sure that Mr Dalli will push to ensure that the Single Market will become a reality through greater competition to the benefit of consumers especially in such European ‘isolated’ communities like Malta.