Suggestion of pricing of household appliances according to supply and demand/decreased quality of products in prescriptive pricing

According to the economic correspondent of Fars news agency, Abbas Hashemi criticized mandatory pricing and its consequences for the country’s production in a press conference today. It should not be used under any circumstances.

The Secretary General of the Household Appliances Association stated that mandatory pricing creates problems for production activities and we discussed this issue with the market regulation headquarters, the support organization and the ministry. silence We have raised, he added: due to the increase in the price of raw materials, the rate of contracting services, etc., the price of household appliances should have been increased, but due to the livelihood problems of the people, the government is looking for mandatory pricing, which creates problems for production.

He stated that in such a situation, some producers reduce production to reduce losses, and said: As production slows down, there will be a shortage of goods in the market, and with a shortage of goods, we will see an increase in prices and, as a result, smuggling will flourish. In fact, instead of benefiting the consumer, mandatory pricing will be detrimental to both the consumer and the producer.

Hashemi pointed out that the economic commission of the parliament has entered into the issue of mandated pricing, and stated: the household appliance association is also looking for a scientific solution to overcome its negative effects in cooperation with this commission and one of the country’s industrial universities. One of the negative effects of prescriptive pricing is the same methods tested in the world as a result of determining the price in the market based on the supply and demand mechanism.

He stated: Since there is an anti-monopoly law in the country and household appliances are not exclusive products, a competitive environment should be allowed to form in this industry and market.

The Secretary General of the Household Appliances Association stated: According to the regulations of the support organization, the producer is allowed to sell his products with a 17% profit, while some items of household appliances are only allowed to increase the price by 10%.

Hashemi stated that no producer is looking for the product to become more expensive, but the producer should be allowed to adjust the price based on the inflation. In the current situation, and according to the mandated pricing, producers have gone to supply cheap goods to avoid losses. .

He added: Producers do not benefit from price increases in recession, but based on the price of inputs, they may have to increase prices, although according to the agreement made with the support organization, if the price increase of inputs is less than 5%, they will not request a price increase. to give

The Secretary General of the Home Appliances Association also said about the export of home appliances: the export of the home appliances and parts industry is 300 million dollars per year, which is very low for this industry.

In the continuation of this meeting, Mahmoud Qahari, the spokesperson of the Home Appliances Association, also criticized the mandatory pricing and said: Although several meetings between the Ministry silence and Iran Household Appliance Industry Association In the subject The request for a price increase of household appliances was held and its review was held, and during these meetings all the reasons for the price increase request of the Association of Household Appliances were submitted to the Ministry silence It was announced, but in June of this year, a 10% price increase permission was issued, while due to the increase in the price of raw materials, transportation costs, increase in wages and other costs, it was expected that a 40-50% price increase permission would be given to producers. to be given.

He stated: Even if the permission to increase the price by 40% was given to the producers, it was not possible to apply it due to the competitive conditions.

He stated that the pricing is to the detriment of the producer, and said: Even if the producer suffers a loss, he cannot stop production due to the existence of a large number of workers. Rather, in this situation, companies resist by reducing profits, selling goods in installments and other methods so that the company continues to produce.

The spokesman of the Iranian Household Appliances Industry Association stated: Now a lot of production is done by various companies, and the manufacturers’ warehouses are full, and everyone is thinking of supplying the products to the market.

Qahari said about the long-term sale of home appliances: it is possible that a company has done such an action regarding one of its products, so it should not be attributed to all home appliance manufacturing companies, and it should not be said that home appliance companies are similar to car manufacturers because with Paying attention to the number of home appliance manufacturers does not mean a monopoly in the home appliance sector.

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