NO SPECIFIC figure of what constitutes profiteering in the run-up to the introduction of the euro was yesterday given by organisations working closely on the transition.
On Monday, President Papadopoulos announced that 100 inspectors would be appointed to monitor prices on a daily basis, but he failed to state what an unjustified rise actually was.
Andreas Charalambous is Director of Finance at the Ministry of Finance who is in charge of the transition to the euro.
“There are no simple rules when trying to evaluate what constitutes profiteering,” he said. “However, any rise above the rate of inflation could be an indication that there is a problem.”
He added that an investigation would be launched in cases where price rises were above average, with special emphasis placed on whether such rises were justified.
“We have developed certain benchmarks and if increases go beyond these, we have instructed the euro observatories to look into it. Evaluation will be conducted on a case-by-case basis.”
The President of the Cyprus Chamber of Commerce agreed. “The inflationary rate of two per cent is the average for the whole economy, including products and services, therefore it is not a good yardstick,” explained Manthos Mavromatis.
“What constitutes profiteering is very difficult to determine and I cannot give you a specific figure,” he said.
“But what I do want to make clear is that, at present, we are seeing very high increases in the price of oil and cereals, which are bound to raise the price of goods required for everyday living.”
He said this has nothing to do with the transition to the euro, but was a worldwide phenomenon affecting everybody on the planet.
“According to The Economist, the commodity index, in dollar terms over the past year, has risen by 20 per cent while the food index has risen by 45 per cent. There is less poverty now and the first thing that people do with extra money is increase the quality of their diet.”
Vice Chairman of the House Commerce Committee Maria Kyriakou of DISY warned that any business rounding up its prices would be deemed to be profiteering, adding that any goods or services rising in price over the inflation rate could set off a red flag.
“Nevertheless, different types of businesses incur different costs, for example raw materials, and the best defence for the consumer is to be alert and aware,” she said.
On Tuesday, the Consumers’ Association had stated that price increases in excess of inflation would be investigated by the government inspectors.
President Petros Marcou stated: “For us, profiteering will apply to any increases above the normal inflationary rate, which is around two per cent.”
He clarified, however, that there was a difference between justified and unjustified increases. “If petrol goes up it could be justified by an increase in international prices,” he said, adding the same applied to bread prices.
“It all depends on individual items.”
