Can retailers maintain profit margins under the new pricing?

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Retailers Can Maintain Profit Margins Under the New Pricing Scheme

Retailers are expected to maintain their profit margins under the newly implemented 2021 Aidilfitri Festive Season Maximum Price Control Scheme (SHMMP), as margins have been established at all levels of the supply chain. The scheme, which began nationwide on April 21, sets the maximum price for standard chicken at RM7.90 per kilogram. Officials have indicated that this structure is designed to prevent sellers from encountering business difficulties.
Established Supply Chain Margins

The Domestic Trade and Consumer Affairs Ministry has implemented a pricing structure that accounts for margins at each stage of the chicken supply chain. This includes a farm-level price of RM5.80 per kilogram, with wholesale prices also being stipulated according to specific geographical areas. These pre-determined margins are intended to ensure that when chicken reaches the retailer, the pricing allows for adherence to the maximum retail price without compromising seller viability.
Ensuring Adherence and Stability

During market checks conducted on the first day of the scheme, retailers were observed selling chicken at the stipulated maximum price of RM7.90 per kilogram. While some initial adjustments were anticipated at the wholesaler and retailer levels due to the scheme's implementation, the ministry has stated that sufficient time will be provided for all parties to comply. The overall objective of the SHMMP is to ensure a stable supply of controlled items at reasonable prices for both consumers and sellers.
Broader Scheme Objectives

The Aidilfitri Festive Season Maximum Price Control Scheme encompasses a total of 12 items across four categories, including chicken, chicken eggs, meat, and seafood. The inclusion of vegetables and dried food items is also planned for future announcements. By establishing maximum prices, the scheme aims to prevent price gouging and ensure the availability of essential goods during the festive period, thereby benefiting the common good.

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Can retailers maintain profit margins under the new pricing?

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