InternationalInternational Economics

Put aside increasing government involvement in pricing / price suppression policies

Abbas Hashemi in an interview with Fars News Agency economic reporter and in response to the question about the supply and production of raw materials for home appliances in recent months, said: To be honest, if the government does not intervene, the space for producers and economic actors will calm down, the government If it frees up space for the private sector and allows private sector activists to do their job, things will calm down and get better.

The Secretary General of the Iranian Home Appliance Industry Association stated: One of the interventions of the government is to get a code from the buyers of home appliances, while the buyers of home appliances sometimes refuse to give their national code to the seller, and therefore these things, except Buying smuggled goods will not work.

In response to the question that providing a national code for the purchase of home appliances is optional and currently does not have to be provided by the buyer, so how this issue can affect the market, he said: I do not know the details of this plan, but the purpose of implementation This plan is to prevent hoarding. This is while the consumer buys the goods he needs individually and the producers also give incentive packages to the bankers to sell their goods, such as tourist trips, pilgrimages and even trips abroad, so this situation shows that the producers happen to be. They think of offering their goods in different ways and there is no problem or shortage that leads to hoarding of home appliances.

* Government interference in the pricing sector has increased

Hashemi, in response to the question whether the government’s involvement in the productive sectors has decreased with the coming to power of the 13th government, said: “No, incidentally, contrary to government interventions, especially in the pricing sector, the fact is that we We have unequivocally told the Parliamentary Commission and the Parliamentary Research Center, as well as the Ministry of Industry, Mines and Trade, to abandon price repression policies.

* 80% increase in raw material prices

The secretary of the Iranian Home Appliance Industry Association stated: The price of raw materials has increased by 80% compared to the same period last year, so in these circumstances, insisting on keeping prices low is to the detriment of the consumer.

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He added: the pricing of goods is based on the economic formula and therefore it is not possible, when the cost price of a product for the producer is A Rials, he expected the producer to offer that product at a price of A minus 10 Rials.

Hashemi said: “Therefore, whenever due to inflation, or the increase in the price of currency and other components, home appliance manufacturers are forced to increase the price and request a price increase, the Ministry of Silence or the protection organization will not allow this.” However, the The economy is not commandable. The private sector is not a government employee.

Emphasizing that producers can not continue on this path, he said: “While being strict about pricing gives the producer a signal not to invest.”

Hashemi, in response to the question that given that the price of home appliances is set by the manufacturer, then how the government interferes in the pricing of this sector, said: Yes, the manufacturer of home appliances sets the selling price, but this price is used Parameters and components are set and until this price is not approved by the sponsoring organization and the 124 system of the sponsoring organization does not approve, the new prices will not be applied and any price increase other than this framework is considered a violation.

He added: “Therefore, whenever the manufacturer requests a price increase based on the available parameters, the protection organization will review the price increase request during a process of several months, so due to exchange rate fluctuations and inflation and rising raw material prices, the requested price increase should be.” Repeat according to inflation.

The secretary of the Iranian Home Appliance Industry Association added: “The price of currency, which is never fixed, and since the calculation of raw material prices is based on world prices and current exchange rates, the producer unit can not plan production at all.”

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He said: “Therefore, with changes in the exchange rate, since the calculation of the cost price is based on world prices of raw materials and the exchange rate, the producer unit can not plan to conclude export contracts.”

Hashemi said: “Manufacturers, based on the parameters mentioned above, request a price increase to the protection organization, but as I said, it depends on whether the protection organization allows this price increase or not.” Of course, sometimes even political issues affect the pricing process, and at some point in time due to some political events, no price increase may be allowed.

He added: “Considering these conditions and tying all issues to other issues, we can not expect sustainable industrial development.” Industrial production and development environment requires a calm and stable environment and requires the right mechanism.

* Private sector efforts to improve the quality of home appliance products

In response to the question why, despite the great emphasis on the consumption of domestic appliances, the quality of home appliances production does not satisfy the consumer, he said: “Yes, this is true, I am also a consumer and accept this.” I have. But to be honest, the private sector is working to develop the quality of products, production and development of after-sales service network and upgrade and increase the product warranty period.

Hashemi said: “In recent years, good things have happened in the field of home appliance production, and due to the competitive environment, home appliance manufacturers have paid good attention to the use of new technologies and have tried to improve the quality of products.” So that now we are witnessing the production of goods such as TVs, refrigerators, washing machines and small appliances in terms of quality, quantity, after-sales service. Let’s not.

He added: “Certainly the quality of production has changed a lot compared to a year or two ago, but it should be noted that improving in this direction requires time.”

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