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12° Nicosia,
31 May, 2024
 

The 'controversial' e-kalathi bill: House and stakeholders remain unconvinced

Disagreements, concerns, and potential revisions cast doubt on the proposed digital tool

Maria Eracleous

Maria Eracleous

The e-kalathi bill fails to convince the House and stakeholders. Yesterday, the Commerce Committee of the House of Representatives held discussions on the matter, with Minister of Energy, Commerce, and Industry George Papanastasiou present. The meeting was marked by numerous disagreements and objections from the majority of stakeholders and MPs. Concerns were primarily raised regarding the practicality of implementing the digital tool for daily price recording. Reports from the Commission for the Protection of Competition about the potential formation of cartels and warnings from the Association of Hypermarkets, stating that the measure could harm small businesses, further fueled the reactions. We now await the Ministry's and the relevant Consumer Protection Agency's next steps regarding the bill's preparation. It remains uncertain if a revised draft bill will be presented in Parliament in the upcoming weeks after further consultations on the matter. It is possible that input from President Nicos Christodoulides will also be sought to determine the subsequent course of action.

"Fear of transparency"

"Our culture struggles with transparency, and they should have the courage to openly admit it to the consumers." -Papanastasiou

Energy Minister Papanastasiou expressed clear annoyance in his statement, highlighting the presence of unfounded fears and a culture that resists transparency. He stated, "Unforeseen fears have emerged, which were never disclosed during public consultations, reflecting the prevailing environment in Cyprus. Our culture struggles with transparency, and they should have the courage to openly admit it to the consumers." The minister emphasized that these fears have created concerns among those responsible for implementing the measure, those who will utilize it, and those who will decide on its implementation. He reiterated that the ministry's primary concern is the consumer, not various vested interests. Papanastasiou explained that the proposed tool aims to provide price transparency for consumers, but it appeared that most stakeholders were not interested in transparency. He emphasized that this lack of transparency exposes the consumer to potential inaccuracies, and he finds this lack of transparency troubling.

The variations

In his statements, both within the committee and in front of journalists, the minister in charge implied that there were inconsistencies in the approach to the issue and that the disagreements expressed during the committee meeting had not been raised during the previous consultation process. However, the chairman of the committee, Kyriakos Hatzigiannis, held a completely different stance compared to the previous discussion in Parliament. Specifically, during the session of the Commerce Committee on March 7, which was attended by the current Energy Minister George Papanastasiou, Hatzigiannis urgently called for the government to submit a bill for the creation of a tool that would enhance transparency in consumer product prices, later named e-kalathi. At that time, he set a timeframe of 3-4 weeks and received a commitment that the bill would be ready within a month and a half. Eventually, the Cabinet approved the bill in late April, and it was subsequently presented in Parliament. However, certain observations were made. Despite the urgent need to prepare the bill, it was only placed on the committee's agenda towards the end of May. In his concluding remarks on the issue, the chairman of the Commerce Committee emphasized that the actual text of the bill deviated significantly from the original expectations, did not correspond to inflation management measures, and instead became an administrative tool leading to a complex and challenging price comparison process for consumers. However, reflecting back on the previous debate on March 7 in Parliament, it was evident that the intention was to create a digital tool for recording and monitoring consumer goods, providing daily prices to promote transparency and assist consumers in making informed choices. Objections to the bill were also raised by Averof Neophytou, who referred to it as a consumer trap, given that it primarily focused on large supermarkets. The change in approach by the committee's leadership appears to be largely influenced by the fact that DISY officially moved into the opposition at the end of April.

Chrysis Pantelidis from the DIKO side was vehement in his stance.

The only change

According to AKEL MP Kostas Kostas, the new version of the bill, drafted by the previous government, only modifies the turnover requirements for companies that are obliged to participate in the platform. While Kostas welcomed the initiative to improve transparency, he recommended that another consultation period be conducted to ensure that the text addresses any potential competition issues and incorporates any necessary adjustments.

Supermarkets opposed

Right from the beginning, the Cyprus Hypermarkets Association expressed its disagreement with the implementation of the platform. During the committee session, Haralambos Papantoniou, the association's president, stated that there is already intense competition among hypermarkets in the industry. He argued that the passage of the bill would create unfair competition between small, medium, and large hypermarkets, ultimately leading to the demise of smaller businesses. Papantoniou also accused the ministry of attempting to interfere with free competition, while businesses already face numerous challenges due to rising operational costs. He predicted that many businesses would be forced to close within a few months and emphasized that there have been no instances of misconduct in the industry thus far. Furthermore, he highlighted the importance of considering various factors in product selection and suggested that the selection should be based on product codes. The OEB, KEBE, and smaller associations representing the supermarket sector approach the bill with skepticism.

Those more open to the idea

Representing the Pancyprian Association of Retail Trade, Secretary General Marios Antoniou commented on the implementation of the tool, noting that it had been applied in Greece without resulting in price reductions. He stated that while they acknowledge the potential benefits and transparency goals, they would be among those who aim to collaborate in formulating the product list based on the same barcode, ensuring that consumers are not led to incorrect conclusions. A spokesperson from the Consumers Association welcomed the ministry's efforts but expressed the opinion that this tool would not directly reduce inflation, although it could help to some extent in controlling prices. They emphasized the importance of conducting comparisons based on product barcodes.

The bill

According to the Bill, businesses in the food and/or other product industry with an annual turnover exceeding €2 million are obligated to submit their product sales prices, while businesses with an annual turnover below €2 million are eligible to do so. However, the specific requirements for declaring products have not been clarified. The decree specifies that for the product codes included, both the selling price and the unit price of the products must be submitted. The bill outlines various product categories to be included in the decree, such as foodstuffs, baby items, household items, soft drinks, alcoholic beverages, water, juices, personal care items, and pet food. Additionally, the platform will be updated automatically at 8 am, and any price changes during the day will be reflected on the platform. The specific products to be included will be determined through an ordinance issued by the Minister of Commerce. It should be noted that in the event of a violation, the Director of the Consumer Protection Service has the authority to order the immediate cessation of the violation, impose an administrative fine of up to €50,000, and impose a fine of €1,000 per day for continued violation. 

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

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