Consumer fraud increases in run-up to festival seasonIn the last few months, several cases of deceptive business practices have been revealed, insiders said.
Nepalis often say they find out about the approach of the festival season by an increase in consumer fraud.
On August 24, a team of government food quality inspectors raided the warehouses of Agad Venture at Balaju, and caught employees in the act of relabelling packages of expired pasta, sewai, cookies, chocolate, soybean, biscuits and around a dozen types of packaged food products.
The officials sealed the two warehouses after confiscating the relabelling machine, chemicals used for printing labels and a pile of documents. The police arrested one person while the company director fled.
On August 2, inspectors found employees at Summit Commercial, Sanobharyang relabelling cosmetics and chemicals used to clean vehicles.
The firm’s directors Abhinash Agrawal and Indian citizen Mahabir Gujar are currently under police investigation.
In the last few months, several cases of deceptive business practices have been revealed—as often happens just before Nepal’s largest festivals which start next month—when opportunist traders seek to take full advantage of the shopping rush, insiders said.
"The arrival of the festivals means an increase in consumption of food and non-food items by almost twofold, and the jump in turnover raises the possibility of unscrupulous activities," said Jyoti Baniya, chairperson of the Forum for Consumer Rights.
“This is the time of the year when consumption increases steeply and causes an imbalance in demand and supply,” he said.
Overcharging in the midst of feverish shopping activity is another sign of the onset of the festival season.
Consumer rights activists say that price hikes in essential commodities due to lack of market monitoring could hit consumers hard this festival season. Prices of almost all items ranging from edible oil to spices and from pulses to sugar have increased in the past few weeks.
Rights groups say the jump in prices is artificial.
According to retailers, the price of edible oil, one of the most essential items in every kitchen, has increased by more than Rs100 per litre and is still rising relentlessly.
Consumer rights activists said that manufacturers had raised the price of edible oil by 15-25 percent on their own.
According to retailers, mustard oil now costs Rs290-300 per litre when this time last year, the price was Rs170-185. The price of sunflower oil has reached Rs265-270 per litre from Rs165 last year while soybean oil costs Rs250 per litre, up from Rs150-155 a year ago.
Sugar has become costlier by Rs20 per kg in the past four to five months and has reached Rs90-95 per kg, which is expected to go up to Rs100 per kg with the disparity in demand and supply due to hectic buying for the upcoming celebrations.
The price of rice too has increased by Rs50-200 per bag, depending on the type.
Shivaraj Sedai, spokesperson for the Department of Commerce, Supply and Consumer Protection, said that despite market monitoring, consumers were facing artificial price hikes, and that relabelling cases had increased which is a cause for concern.
“The prices of commodities are fixed by traders. But if they have hiked prices illegally, they will face action. We have been conducting ‘intelligence’ inspection,” Sedai said.
The department has been taking help from the Central Investigation Bureau for intelligence inspection of the market. But, according to Sedai, provincial and local governments are not seen to be much active in market inspection.
Being a trade-based economy, Nepal is dependent on food and non-food goods imported from other countries. The lack of inspection on imported goods by big traders has been increasing the relabelling case that directly impacts human health, consumer rights activists said.
With an eye on the upcoming festivals, Sedai said the department was planning to reinforce its inspection team by adding 25 officials. The department has deployed three to four inspection teams in the valley consisting of a minimum of four officials each.
Madhav Timalsina, president of the Consumer Rights Investigation Forum, said that the national consumer policy needs to be clear to address the grievances of consumers.
Many complaints are being made lately by consumers who have been buying goods online; but due to lack of laws, consumers continue to be cheated, he added.
Additionally, in the absence of a consumer court, the cases filed against producers and traders are being overlooked. “Relabelling cases have been repeating as the government has not taken strict action against offending traders. Such cases have been thriving as laxity has boosted the morale of opportunist traders,” Timalsina said.