The Commerce Ministry is pressing large retailers to cut the prices of packed rice and other consumer goods to help consumers.
Commerce Minister Porntiva Nakasai said the ministry wanted to take action on reducing the hidden costs of products sold in modern trade stores.
Rice prices have been climbing in recent weeks because of concerns about a global shortage. The price of 100% grade-B Thai white rice rose to $622 per tonne this week from $590 a week earlier.
Product distributors complain frequently about entry fees, promotional fees and other charges for favourable shelf placement charged by chain stores.
Rice packers have been seeking a pact with retailers on fair deals and contracts, claiming they suffer from excessive entry fees and other hidden costs.
In addition to entrance fees ranging from 500,000 to 1 million baht for a new product, packers are asked to rebate about 5-10% of their sales, according to a source from the Thai Rice Packers Association.
The packers are also charged from 500,000 to 1 million baht for advertising through leaflets and mail as well, the source said.
Another issue is the credit terms demanded by modern trade operators, which are relatively long at from 75 to 120 days. This extended credit is criticised for making packers shoulder higher financial costs.
The packers said their production costs would decline and retail prices of packed rice might drop if store operators settled their bills more quickly.
Despite higher export prices, a five-kilogramme package of premium-grade rice in Bangkok now sells at 200 to 210 baht, unchanged from a month earlier. The price of 100% white rice is 140 to 150 baht per pack and glutinous rice 90 to 100 baht.
Source: Bangkok Post
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