Dept to monitor post-freeze prices

Press, 29 February 1984, Page 3

Dept to monitor post-freeze prices

PA Wellington After the price freeze ends today the Trade and Industry Department will monitor prices partly at its own initiative and also as a result of complaints. The end of the 20-month freeze is expected to be accompanied by a number of price rises, with up to 50 already notified to the department. Trade and Industry Department's commerce director for price surveillance, Mr Hunter Donaldson, said yesterday that the department could, if it wished, investigate any increase. But large traders have to notify price increases in advance. Manufacturers whose annual turnover is more than $lO million, and suppliers of services whose annual turnover exceeds ?3 million, will have to notify the department 20 working days in advance of any proposed price rise. They are restricted to no more than two price rises

for any item in the 12 months after the freeze is lifted. While there are no specific requirements on importers, retailers, and wholesalers, they have to report their trading results on a six-monthly basis. The department also has a general power under regulations to fix prices, so that it could investigate any price increase. Mr Donaldson said there was “no intention” to do this generally, and the department would basically be looking at the notified increases and deciding whether they should be investigated. “That is where the public information comes in ... if people draw our attention to significant increases then we’ve got the power to investigate those.” Mr Donaldson said the term “significant” would depend not only on the amount of the increase but also on factors including the type of product and the size and economic significance of the company. “There would be various things we would look at before we would decide if we got involved in an investigation,” he said. The department would apply a screening test when deciding which complaints to investigate. One of the criteria was that if the increase proposed was no more than the movement in the consumer price index over the last year, the department would automatically allow ’ the rise. (The inflation figure

for the year to December was 3.6 per cent.) But other factors, includacost increases, would be en into account. “So just because an increase was notified that was higher than the C.P.I. does not mean we would object to it,” Mr Donaldson said. The Minister of Trade and Industry, Mr Templeton, yesterday described the price freeze as a real success. Inflation had dropped from 17 per cent in June, 1982, and the December figure last year was “very low by international standards,” he said. The department received 8089 complaints of price increases during the freeze. Investigations proved 1173 complaints to be justified, while 6767 were dismissed. A total of 149 were still under examination, he said. The department took legal action in 11 cases and six prosecutions were successful. Applications for exemption from the freeze on the grounds of hardship totalled 2838. Of these, 1757 were approved, 482 declined and 540 withdrawn.