Retailers warn government pricing directive may be unsustainable as supplier cost increases driven by fuel prices force inevitable price adjustments
BONGANI MALUNGA
Local retailers have raised concerns that they may be left with little choice but to increase prices, despite a directive from the Ministry of Trade and Entrepreneurship urging businesses to avoid hiking prices following recent fuel price increases.
Retailers argue that while the government’s intention is to shield consumers from rising costs, the directive does not take into account the realities of supply chain pricing, where they have no control over supplier cost adjustments.
They warn that if wholesalers and suppliers revise their prices upwards due to increased fuel and transport costs, retailers will be forced to follow suit in order to remain financially viable.
VOLATILE ECONOMY
The concerns highlight a growing tension between government efforts to stabilise the cost of living and the commercial pressures facing businesses operating on thin margins in an increasingly volatile economic environment.
Stakeholders say without coordinated interventions across the supply chain, the directive may prove difficult to fully implement on the ground.
NO PRIOR ENGAGEMENT
Ramachandran Ottapathu, the Chief Executive Officer of Choppies, the largest retail chain in Botswana, told The Botswana Gazette that there was no prior engagement between the ministry and retailers before the announcement was made. He noted that although the government’s position is guided by external factors, retailers also have to balance market dynamics that will be affected by the external impacts.
“There was no discussion or consultation. We are traders and we have no control over our cost price. If our suppliers increase our cost price we will be forced to increase the selling price,” Ottapathu told this publication.
Reached for comment, Business Botswana stated that they are currently engaging stakeholders on the matter before communicating an official position on the topic.