More than 10% price increase

Q.Monette Tingin writes: "I wonder how much increase a retailer can offer on the prices of their goods. What is really a legal percentage?

"Last month, I bought a can of 301-ml. sweetened condensed milk from a nearby grocery store here in Pasig, priced at P30. Then, this week, I purchased the same brand at P34! As far as I know, there are no major occurrences that may affect a drastic movement on prices of milk. How come the price of milk surged so high?"

A. According to local milk manufacturers, the oil price increase merely affects 1% to 2% of the manufacturer’s entire operations. Factors that affect the price of milk such as the foreign exchange, cost of raw materials, operations and freight cost, are beyond the manufacturers’ control. However, manufacturers do not consider the latest price movements in the said factors as major reasons for an increase in the retail prices of milk.

The case that you cited is one of the prima facie evidences of profiteering. Aside from the cases of violations on the price tag law, misrepresentations as to the product’s weight and measurement, and adulteration of product, profiteering is also the sale or offering for sale of any basic necessity or prime commodity at a price grossly in excess of its true worth or raising to more than 10% its price in the immediately preceding month (paragraph 2, section 5 of the Price Act).

Note that the provision against profiteering does not apply to agricultural products because these are seasonal in nature.

The Department of Trade and Industry conducted enforcement operations last April 22-23 where 31 violators were required to appear before the DTI mediation/investigation officer. Violators of the Price Act were penalized with an administrative fine of P1,000 while violators of the Price Tag Law were fined P500. Violators also executed an affidavit of undertaking, committing to comply with the provisions of the laws on the pricing of consumer products.

(You may call the Department of Trade and Industry hotline number 8977-DTI for complaints and free consultations on consumer welfare issues. You may also text DTI<space> comment and sent to 2920 or e-mail us at [email protected]. Log on to www.I-reklamo..ph.or www.dti.gov.ph.)