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12° Nicosia,
21 July, 2024
 

Digital app to compare product prices in the works

Commitments to file a bill by Easter was made after preliminary discussions with the new Minister, C. Papanastasiou

Maria Eracleous

Maria Eracleous

Following the withdrawal of the Household Basket proposal in Cyprus, the Consumer Protection Service is now promoting the preparation of a bill for the implementation of a digital tool that will enable the daily comparison of retail prices of products.

Consumers will be able to select the products on their list, compare prices for each product per retail outlet, and determine how much the basket will cost in total per retail outlet. The mobile app will update the selections and notify the consumer of the cheapest supermarket based on the products added to their basket. Konstantinos Karagiorgis, the head of the Consumer Protection Service, stated before the Commission that this tool promotes price transparency. A draft of the bill has already been prepared and will be sent to the Legal Service before being presented to Parliament for discussion, submission of opinions, and voting.

The Minister pledged before the committee that in a month the relevant bill will be submitted to the Parliament

During yesterday's meeting of the House Commerce Committee before the new Minister of Energy, Commerce, and Industry, George Papanastasiou, MPs requested that the bill be tabled within a month, with the Minister responding positively. It should be noted, however, that technical specifications are being prepared in parallel with the legislative review so that the Ministry can proceed with tenders for the preparation of the implementation. In any case, even if the bill is passed, the application is not expected to be implemented anytime soon, and the issue is more practical in nature due to the numerous steps that must be taken.  It must be preceded by a legislative review, passed by the Council of Ministers, debated and voted on in Parliament, the bidding process completed, the project awarded, and then implemented. It is almost certainly impossible to complete all of the above by mid-April. The bill is likely to be introduced in Parliament by Easter, and debate will begin. However, this is subject to the time it takes the Legal Service to complete the legislative review.

The concerns

Stakeholders are concerned about the Ministry's proposal. The association of large-scale suppliers, for example, mentioned a complicated bill that is likely to cause additional problems for smaller supermarkets. The Hypermarkets Association was critical, with its executive secretary Andreas Hatziadamou stating that the draft contains complex issues and legal questions and that any implementation would distort competition and have the opposite effect. Of course, consumer groups and the EPA have different points of view. According to Marios Antoniou, Secretary General of the Pancyprian Retail Trade Association, the draft needs several clarifications.  For instance, the number of products to be included, as well as the products themselves. Whether private labels and fresh products will be included in the product list, as well as the role of quality in fruit, butchery, and fishmonger products. On the other hand, the various sizes of businesses that will be invited to participate in the new platform are an important consideration. On the one hand, there are bakeries, and on the other, there are large supermarkets with multimillion-euro sales.  It is expected that questions will be raised about the types of businesses that will participate in the electronic Observatory, as the draft's reference to bakery products (bakeries) is already causing concern. The Association's request is that key provisions of the draft bill do not conflict with regulations governing free markets and equal competition.

Transparency tool

"It is a simple tool designed solely for transparency. "I'm not going to waste my gray matter on something that will just show us products and prices," the Commerce Minister said after hearing the various points of view. He emphasized that, beyond the implementation of this digital tool, the goal is to achieve organic change, which means lower energy costs and, as a result, lower product prices. Following the conclusion of the committee, G. Papanastasiou stated that the Ministry's goal and his personal challenge is for the industry to develop cheap energy in order to provide competitive products in Cyprus and international markets.  "Whereas today we discussed the tool that will allow us to compare product prices, the Ministry's focus will be to reduce the price of electricity, to produce a competitive product, so that the buyer buys it cheaply."

The turnover

The fact that the bill refers to companies with an annual turnover of more than €8 million was one of the first comments heard, both yesterday in the debate in Parliament and in writing during the consultation on the bill.  Specifically, the draft bill states that all supermarkets with an annual turnover of more than eight million (8,000,000) euros and all bakery products businesses with a turnover of more than one million (1,000,000) euros, based on the financial statements of the immediately preceding financial period, are subject to the obligation to submit price data; and that, without exception, all businesses with a turnover of more than one million (1,000,000) euros, again based on the financial statements of the immediately preceding fiscal period, are required to submit price data. Already, the inclusion of supermarkets and bakeries in the same category is viewed as unfavorable to equal competition and is expected to be one of the changes discussed before the Committee. The Consumer Protection Agency, on the other hand, clarifies that supermarkets with a turnover of less than 8 million euros are also permitted to submit price data.

What the draft stipulates

Price data reporters are required to update the platform with the above data daily, no later than 10:00 a.m., according to the draft bill for the Commodity Price Data Recording and Monitoring Act of 2023. According to the draft, failure to submit or submission of an inaccurate and/or incomplete declaration in accordance with the provisions of this law constitutes an infringement punishable by an administrative fine of one thousand (1,000) to fifty thousand (50,000) euros, depending on the turnover of the price data reporting obligor in the year immediately preceding the infringement, as the case may be, and depending on the gravity of the infringement.  The price data shall be daily shelf prices defined as the retail price, excluding promotional activities, in total per food and/or other product business and/or the previous day's average selling price (total product sales turnover divided by the number of units sold).

What items are included?

According to the draft text, the products to be included in the application are those with the highest consumption and importance for the household, can be the subject of a commercial transaction, and are available in food and/or other product businesses. However, the application does not specify which products will be included.  For this one, it states that the product codes for which price data reporting is required are defined by the Minister by decree published in the Official Gazette and may be revised on a regular basis based on sales and seasonal needs, as determined by the Director of the Consumer Protection Service. It is also noted that the product code number, the name under which the product is presented on the shelf tag, the price of the product as presented on the shelf tag, the average selling price of the product including discounts and supplier promotions, and the unit price in the basic unit of measurement will all be required for product declaration.

[This article was translated from its Greek original and was first published in Kathimerini's 'Oikonomiki' edition on Wednesday]

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Cyprus  |  inflation  |  economy

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