Bt1.62 bn in place for govt's low-price project

The remainder is focused on Blue Flag activities such as low-price food shops and 878 low-price fairs to ease rising living costs. 

Goods on sale at the Raan Thook Jai shops will be priced 20 per cent lower than market prices. To facilitate the plan, the ministry will directly negotiate with major suppliers for special prices of goods.

It is also in talks with Thailand Post to handle the logistics of getting the items to all designated locations. As a result, most of the Bt1.32-billion part of budget will be used to pay for the services of Thailand Post. The budget will also subsidise alliance shops to employ more staff to run the scheme. 

Previously, the ministry said it would provide support of between Bt50,000 and Bt100,000 per outlet as working capital. Yesterday’s budgetary approval by the Cabinet came as the government was faced with many complaints from across the country that goods prices had increased significantly during its time in office, largely as a result of higher production costs. Moreover, costs are expected to rise further in light of the upcoming across-the-board hike in the minimum wage.

However, some consumer-goods producers are concerned about the efficiency of the government’s measures to alleviate the cost-of-living burden, as they could destroy the market mechanism and lead to huge additional public spending.

Commerce Minister Boonsong Teriyaphirom yesterday said the ministry targeted an alliance with 10,000 grocery and other food shops under the One Shop One Community scheme. The ministry will distribute 20 essential goods through the stores, including rice, eggs, vegetable oil, instant noodles, canned fish, sugar, fish sauce, UHT (ultra-high-temperature treated) milk, pork, chicken, soap, toothpaste, shampoo and detergent. The range of goods will change depending on market needs and prices.

“The products supplied to the shops will be on offer below market prices and will come under the Thook Jai Shop brand,” Boonsong said.

The project will be divided into two phases. First, about 2,000 shops selling low-price goods will be introduced in April, with the scheme being launched in Bangkok and 15 other provinces. In the second phase, another 8,000-10,000 stores will be introduced nationwide.

“The project aims to help 10 million low-income consumers, and it should help reduce their spending by about Bt36 billion this year by offering goods at 20 per cent lower than normal market prices,” the minister added. 

A source from a consumer-goods manufacturer said the government should not organise Blue Flag projects too regularly, otherwise the market mechanism would be distorted. 

“The government is mistaken in its implementation of this [Blue Flag] project, as it should be launched for a short period. The more often a Blue Flag fair is arranged, the more the scheme will undermine the supplier trading environment.” 

The source added that the government should concentrate on ways to help manufacturers reduce production costs rather than competing with suppliers by selling cheaper goods.

Consumers now have a variety of choices of goods and prices, the source said, as retailers are offering house-brand products at lower prices than the leading brand quoted. Rising labour wages and raw-materials costs are the urgent problems needing to be solved.

“The government should focus on solving upstream rather than downstream problems,” said the source.