[UPDATED] Buy cheap to force prices down, Rafizi tells rakyat

KUALA LUMPUR – Food and beverages will continue to be sold at inflated rates as long as consumers keep choosing to support businesses that set exorbitant prices for their goods, said Economy Minister Rafizi Ramli. 

Speaking during a press conference in Putrajaya today, Rafizi said that the culture of elastic supply and demand principles have yet to be adopted by citizens here, leading to traders being allowed to impose high price tags on their products since customers continue to buy from them.  

“Only if there is reduced demand will business operators have an incentive to control their prices. 

“If lessened demand does not happen, then you can’t blame them (traders) for passing on (the additional charges) to consumers,” he said.

As such, the Pandan MP advised consumers to be more conscious of prices when purchasing items from the sector. 

He noted that while the ministry will be doing its part to manage inflation rates, the people should opt for cheaper options to send a message to traders. 

“I’m not saying that you should boycott sellers (who averagely sell their products at higher prices) but there are a lot of substitutes that consumers can opt for instead. 

“I myself do not buy expensive coffee. For me, RM3 for a coffee is considered expensive,” he said. 

While admitting that behavioural economics is complex, he said that the ministry will direct its attention towards fair price accountability by developing an ecosystem based on nationwide costs of food and beverage products.  

“(If the ecosystem is realised) then buying habits will be influenced by reasonable pricing and businesses will know that if they raise their prices they will lose customers,” he said. 

“The most sustainable way to manage prices is to inject elasticity (in supply and demand) through better competition, (which will happen with) the public having better access to pricing information. 

“By right, if the price of chickens is so expensive, then we should reduce eating chickens.” 

Rafizi had earlier announced that the nation’s inflation rate for November remained elevated at 4%, the same as with October, which was heavily influenced by the food and non-alcoholic beverages expenses category. 

The section makes up 29.5% of all household expenses which determine the consumer price index, with 11.5% spent on dining out. 

Rafizi also said that while citizens are opposed to being told that their spending habits are contributing to inflation rates, it is a “politically explosive” reality that must be realised for the betterment of the economy. 

“The public does not like to be told that the fact that it continues with its consumption habits is because consumers can still afford (goods at the current costs).

“However, hypothetically speaking from an economist perspective, if the demand has not gone down, then that means that prices are still okay,” he said. 

Rafizi added that while previous ministers had avoided answering questions regarding the costs of goods, he is willing to do so now as the people have to be involved in a “collective” effort to ensure sustainable inflation rates. – The Vibes, December 23, 2022