Consumer complaints have increased significantly over the last months, according to the authority tasked with protecting their rights, as inflation grows and prices rise daily across the board.
Complaints about higher prices being charged than originally agreed for ordered goods and services, as well reports of discrepancies in prices from shelf to cashpoint, are being filed much more frequently to the Malta Competition and Consumer Affairs Authority.
They are the main queries the authority is receiving as people begin to question whether the hikes, attributed largely to the Ukraine war and the pandemic, are justified and what is being done to protect them as they continue to absorb, grin and bear it.
The authority said that in the case of increased prices of ordered goods and services – where deposits have been paid, delivery and installation are still to be carried out and traders charge more due to additional costs from the supplier’s end – the original sales contract agreed to must be honoured.
Consumers feel exploited
Many believe that arbitrary price hikes are being slapped on them under the pretext of the global economic situation.
Cost increases for services such as car washing, beauty treatments and animal grooming – which did not appear to be affected, at first glance, by the soaring prices of transcontinental transport and importation and the production of basic food ingredients – are leading consumers to feel they are being exploited and have nowhere to turn to for protection and redress.
Other issues they face include items of the same batch number being sold at higher prices under the pretext of escalating costs even if they were already in stock.
But consumers’ main gripes, according to the authority, refer to different prices from the shelf to the cashpoint, with retailers saying the constant change in costs is making it hard for them to immediately update prices.
While the MCCAA does receive similar complaints and queries, these past months the authority noted a significant increase in such complaints.
It acknowledged this was in breach of the Price Indication Regulations and qualified as an unfair commercial practice but pointed out that, upon surprise inspection to immediately stop any violations, most retailers were found to be compliant with consumer legislation.
Sources involved in consumer protection have questioned whether regulatory entities were carrying out studies of the market to determine whether the price increases were always justifiable and exactly by how much these should be going up.
40% price rise
Asked about a potential trend to ride on the wave of accepted ‘excuses’ for price increases without any checks and balances, the Malta Chamber reiterated the current “interplay of a number of inflationary factors”.
From Ukraine being a major supplier of basic commodities to supply chain bottlenecks triggered by COVID, hefty increases in fuel prices and energy and a shortage of truck drivers, “all these factors contribute to higher import prices, which are then reflected in higher retail prices of imported goods,” the chamber said.
Year-on-year, producer prices in Europe have increased by almost 40 per cent, it continued, adding that statistics indicated, however, that so far prices on the continent were rising faster than in Malta.
What is impacting services most is an acute shortage of labour, which was expected to get worse locally over the summer months, it warned.
“Restaurants will get busier, and given the current labour shortage, demand-side pressures are likely to compound the current supply-side inflationary pressures.
“So, while costs have increased and consumer prices are increasing too, margins are likely to be lower than pre-COVID.”
The Malta Chamber pointed out that constant price hikes were administratively costly.
“Many businesses are also aware that consumers are likely to shift to cheaper alternatives when prices of certain products increase substantially. But when cost increases become systematic and persistent, price increases become inevitable.”
It distinguished between discretionary spending and basic needs, explaining that eating out was an example of the former and people were likely to adjust their spending patterns according to what they could afford.
Lower-income households felt the pinch most in the basic-needs department, with food constituting a significant portion of their spending and 85 per cent of what is consumed being imported and impacting both grocery shopping and eating out.
“Interventions to support lower-income groups are likely to be more effective at containing the adverse effects of excessive inflation than trying to control prices, particularly since most of the inflation is imported,” the chamber said.
Asked how she was addressing the soaring prices that consumers, especially the elderly, were facing and struggling with, Consumer Rights Minister Julia Farrugia Portelli said this was a reality practically all countries were living and again pointed to the Ukraine war in particular for the impact.
Pushed about more concrete assistance to consumers, Farrugia Portelli referred to the government cheques, issued twice to compensate for the cost-of-living increase, singing its praises for absorbing the daily increases on energy bills, unlike other countries.
She said the government would continue monitoring the situation and taking decisions in the interest of the consumer.