Quick buck on rice: FairPrice
acts
AS RICE prices head north, some traders and small
businesses are apparently turning to Singapore's largest
supermarket retailer to make a fast buck. They seem to be buying
the cheaper rice sold at NTUC FairPrice to resell them at a higher
price.
To discourage such bulk buying, which would reduce stocks and
potentially drive up prices, FairPrice, for the past month, has
been advising customers to buy no more than five 10kg bags of rice
each.
If customers were to attempt to buy in excessive amounts – say,
20 bags of rice – FairPrice staff would intervene and tell
customers they could not do so under the policy.
"We have seen a handful of customers who have bought excessive
bags of rice," said FairPrice managing director (Singapore) Seah
Kian Peng in a statement on Friday. "We suspect that these are
traders or small businesses who take advantage of our low
pricing."
According to FairPrice, about "a handful" of customers have been
stopped by staff from buying large amounts of rice since the
measure took effect.
Mr Seah gave the assurance that FairPrice has "adequate supplies
of rice" and that its stockpile is at a "healthy balance".
While the policy has been in place for about a month, some
frontline staff at one FairPrice supermarket were unaware of the
measure.
"We don't know about this ... if customers want to buy 20 bags
also can," one cashier told this newspaper.
According to rice importer Chye Choon Foods' managing director
Jimmy Soh, the steep prices in rice had initially resulted in some
hawkers going to supermarkets for rice supplies rather than
wholesalers.
"Retail prices don't fluctuate as quickly as wholesale prices,
so wholesale rice became more expensive," he said.
But for traders and small business owners to buy from a retailer
and resell at a higher price, Mr Soh felt that the profit margins
were not significant enough for it to become a widespread
practice.
When approached by Weekend Today, hawkers and food caterers said
they did not buy rice from FairPrice, because wholesalers would
deliver the rice to them. "Most caterers will at least order 50kg
each time, so it's more convenient. It's also sometimes cheaper
than NTUC," said Ms Marilyn Fong, 36, purchase manager for KCK Food
Catering.
Said Mr Chua Chin Teck, 50, a worker at a pig organ soup stall:
"It is more convenient to get from suppliers because we have no
time to go to NTUC."
Other supermarket chains in Singapore said they were not
planning similar measures.
Mr Wong Heng San, spokes-man for Sheng Siong Supermarket, said:
"We don't see a need for such a limitation, because we are not
selling our rice below cost. If retailers sell their rice below
cost, then maybe they will be a bit more worried about how much
people buy."
Rice sales are stable and stocks remain adequate, he added.
A spokesperson for Giant Hypermart and the Cold Storage Group
said that there are "no quotas (on buying rice) except during rice
promotions. There's no necessity for it currently as rice sales are
stable".
Consumers we spoke to did not feel that the move would affect
them as they did not buy rice in large amounts.
Bank officer Fazlinda Sallim, 35, said while the NTUC policy
could make it inconvenient for people to buy in bulk, "they can
still buy them on different days, or just go to other outlets to
buy the rice".
A quota of some kind on customers could be a good measure in the
short term, as it would help to prevent artificial inflation of
prices because of hoarding, said S Rajaratnam School of
International Studies associate research fellow Ng Sue Chia.
Whether FairPrice's approach of encouragement rather than
enforcement would be effective is "hard to gauge", said Ms Ng, but
it was sure to create the awareness needed to prevent opportunistic
behaviour.
Also, the frontline staff would have to explain clearly to
consumers the rationale behind such recommendations. "If not, the
consumers might interpret the move as an indication of further
reduction in rice supplies," said Ms Ng.