Warns price controls could lower product quality Urges govt.
In an extraordinary gazette notification released earlier this week, the Sri Lanka Consumer Affairs Authority (CAA) imposed price controls on bottled water, to be enforced starting from October 5, 2018.
“As more than 120 companies battle for a foothold in Sri Lanka’s competitive bottled drinking water market, worries over unsafe and low quality products is concerning,” Advocata said.
The maximum retail prices enforced through this gazette vary between Rs.26 and Rs.170 depending on the size of the bottle.
According to a basic survey carried out by Advocata, market prices of bottled water for a 500 ml bottle, prior to the enforcement of the price control varied between Rs.45 and Rs.85.
Yet the reality may be different.
“Coupled with loose enforcement, consumer price controls in Sri Lanka have skewed the market towards a preference for lower quality products.
The price controls on water bottles, will likely to do the same,” Advocata said.
Low production cost lead to the sourcing of low quality raw materials, in this case, water and plastic,” Advocata said.
“In responding to price controls, the usual case is that producers would resort to producing low quality products in order to remain within the vicinity of the controlled price” said Ravi Ratnasabapathy, Resident Advocata Fellow and co-author of ‘Price Controls in Sri Lanka’ report.