Filenews 1 January 2024
The global economic conditions prevailing over the last three years have resulted in a large increase in commodity and services prices as well as lending rates and have inevitably significantly affected consumer purchasing behaviour. Especially those in the low and middle income strata. Even worse is the situation for vulnerable groups of the population.
Inevitably, voices about the need to support and protect consumers are increasing, not only in Cyprus but throughout Europe.
Consumers no longer make uncontrolled purchases, at least in a large percentage, but instead conduct extensive market research to arrive at the most advantageous choice of products, while at the same time claiming more vigorously their rights, as they derive from European law.
The power of consumers depends on knowledge of the right choices and behaviours of action and reaction. In this context, appropriate training, education and provision of tools for transparency and price comparison is essential in order to develop a proper consumer culture.
In view of the above, it is necessary to strengthen consumer protection measures, which will support them effectively and efficiently. Such measures should cover the areas of product safety, informing and educating consumers about their rights and businesses about their respective obligations, supporting consumer organisations, strengthening consumer rights, providing access to alternative dispute resolution and enforcement.
For this reason, the Ministry of Commerce has included in its Strategic Plan for 2024 – 2026, under the objective of strengthening consumer protection and empowerment, specific activities aimed at:
1. The enforcement of consumer rights.
2. Enhancing consumer safety.
3. Improving information and education of consumers and businesses.
THE PRICE OBSERVATORY
For the best possible information of consumers, the Consumer Protection Service implements, as of January 2023, the upgraded monthly Price Observatory, which gives the consumer an objective, comparative depiction of purchase prices, presenting the weighted average price for 250 basic consumer products (food and other), from 400 retail stores nationwide. The Observatories also provide the Office with the ability to control and monitor prices in order to intervene where market profiteering occurs.
For the consumer, however, these observatories cannot be used in advance to select products that are as cheap as possible. The recording of prices refers to a previous period of time and not to a future one.
FULL STEAM AHEAD FOR "E-KALATHI»
In May 2023, the Agency forwarded to the House of Representatives a bill that provides for the collection and monitoring of retail prices of food and other commodities. The aim is to enable the implementation of the digital platform "e-kalathi", which will provide transparency with daily information to consumers on real-time market prices, price comparison and choice of the cheapest point of sale. It will also enable the Consumer Protection Service to monitor the market. The bill was approved by Parliament in early December, after long discussions and controversies, and its utilization is estimated to begin in June 2024, after the completion of the software on which it will be based.
Konstantinos Karagiorgis, Director of the Consumer Protection Service, explained that the Service will proceed quickly with the announcement of a tender for the supply of the application. The tender is estimated to be completed within two months from the day of publication, after which a period of 3 to 5 months will be needed to complete the necessary procedures. "So the estimate is that the platform will be in place in the summer of 2024," he added.
As he explained, "e-kalathi" will concern an application on mobile phones and tablets (android and iOS), but also a web application, accessible via computer.
Regarding the products that will be included in the platform, Karagiorgis said that the products that will be selected will be those with the highest demand and weight in the household basket, based on statistical data and will be included in the decree expected to be issued by the Minister of Commerce.
The law, as voted by Parliament interventions, provides that the minimum annual turnover of supermarkets that will be obliged to submit product sales prices to the platform will be €5 million, instead of €2 million. requested by the Consumer Protection Service. The term "product code" has also been added to clarify that the comparison will be based on the same barcode.
REDUCED VAT
In addition, with the aim of restoring consumers' purchasing power, the Service proposed in March 2023 to the Ministry of Finance the reduction of the VAT rate on basic essentials. The recommendation was applied to 7 products (bread, milk, eggs, baby food, baby diapers, adult diapers, feminine hygiene products). Coffee and sugar have been added to this list since 1 November and meat and vegetables since 1 December.
CAP ON BOTTLED WATER
Furthermore, the Service has prepared and put to public consultation a draft law entitled "The Fixing of Maximum Retail Prices for Products at Specific Points of Sale where sufficient competition cannot develop Law of 2023". The proposed bill lays down rules on the setting of maximum retail prices for products at specific points of sale, where by object sufficient competition cannot develop, such as airports, ports, indoor beaches, theatres, stadiums, etc.
The Consumer Protection Service also works to implement actions aimed at enforcing and strengthening consumer protection, such as handling complaints, continuous market monitoring and enhancing price transparency.
In this context, the budget has included a provision "Technical Assistance for Harmonization with the Community Acquis – Rights of Experts" amounting to €50,000 concerning the purchase of the necessary equipment that will support the specialized computer system developed by the Service, which will automate the Process of Management, Control and Market Surveillance for the benefit of consumers.
CONSUMER EDUCATION
As regards consumer information and education, these actions aim to improve communication and cooperation with consumer organisations and other stakeholders, raise awareness of consumer rights and make more effective use of new technologies.
The Ministry of Commerce attaches particular value to consumer information and education, in order to achieve the development and consolidation of proper consumer behaviour. This goal is implemented in various ways, the main of which is to inform "young" consumers, i.e. primary and secondary school students, but also teachers themselves, about consumer rights. Therefore, the cooperation of the Service with the Ministry of Education, Sports and Youth is close and continuous.
In the same context, the Service plans a series of information actions, mainly in cooperation with the Press and Information Office, through radio and television broadcasts and messages, publication of information bulletins and brochures, creation of advertising/promotional material, publications in the press, operation of modern methods of enlightenment/communication with consumers (e.g. social media), agreement for the provision of a database for the upgraded Price Observatory, organising information campaigns and liaising with consumer bodies, trade unions and organisations of commercial industrialists. For the implementation of the above, the provisions have been included in the 2024 Budget
"Information Campaigns" with an amount of €5,000 and "Enlightenment" with an amount of €105,000.
The budget has also included a specific provision of €5,000, which is intended to cover the expenses for the organization of conferences/seminars, workshops and other events in Cyprus, such as the annual event for World Consumer Day, which aim to inform and educate consumers about their rights and entrepreneurs about their obligations in relation to consumer protection legislation.
SUPPORT FOR CONSUMER ORGANISATIONS
In addition, the Service continues to support consumer organizations and sponsorship in 2024 will be increased compared to previous years. More specifically, an amount of
€70,000 is expected to be granted as state sponsorship to the Trade Unions' Consumer Associations and Unions. This provision covers, mainly, expenses for their activities related to consumer information and education, promotion of the protection and safety of consumers' economic interests and strengthening cooperation with other competent bodies, especially through specific programs they implement.
With regard to European and international cooperation, the Office intends to participate, inter alia, in meetings and activities of the various CPN (Consumer Policy Network), CPC (Consumer Protection Cooperation) and Safety Gate networks, as well as in the committees and working groups of the European Commission and the Council of the EU. It will also continue to participate in the activities of the International Consumer Protection and Enforcement Network (ICPEN) and to support/utilize the activities of ECC Cyprus (European Consumer Centre Cyprus). For this purpose, the amount of €25,000 has been included in the provision "Participation in EU Committees/Working Groups".
Furthermore, the amount of €35.000 has been included in the budget, "Projects Co-financed by Community Funds", which covers the operation of the ECC Cyprus (€21.000), the participation in joint market surveillance programs carried out at the initiative of the European Commission (€6.000) and the participation in EU workshops in the framework of the implementation of the CPC Regulation (€8.000).
In addition, as far as international cooperation is concerned, the amount of €8,000 has been included in the 2023 Budget for the "Conferences, Seminars and Missions Abroad" provision, which will cover, mainly, the costs of participation in meetings of the international ICPEN network, where the Service actively participates.
Finally, in relation to enhancing consumer safety, the Consumer Protection Service has included a provision "Sampling, Testing and Laboratory Testing of Goods and Services", amounting to €6,000, to cover the sampling of various products on the market, as well as for the examination of these samples in specialized laboratories to assess the risks they present to consumers and their compliance with current legislation.
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