Soft drinks companies slam prices controls

Businesses start to criticize, publicly, the prices controls policy of the government. At last !

Thai Namthip Ltd, the local bottler of Coke, Fanta and Sprite, yesterday criticised the Internal Trade Department for refusing to let soft-drink companies raise prices even though sugar and transport costs have soared in recent months.

The state-mandated price ceiling on ex-factory prices was distorting the entire market, said Pornwut Sarasin, the vice-chairman of Thai Namthip.

”The department should allow the soft-drink market to move freely under the current market mechanism. If soft drinks are priced higher, then consumers will decide for themselves whether to buy or not,” he added.

Soft-drink companies saw their production costs surge because of the impact of higher oil and sugar prices.

”What the department should do is to play a major role in monitoring fair trade among operators in the market rather than making a market intervention,” Mr Pornwut said. (Bangkok Post)

It’s a perfect summary of how a free market should work… common sense and rationality.

Now here is the mindset of the authorities.

However, Yanyong Phuangrach, the director-general of the Internal Trade Department, said it had not yet taken into account any request from soft-drink companies to raise their prices as it was not an urgent issue.

Instead, the director-general urged producers to weigh the impact on the entire economy, particularly for inflation, if soft-drink prices were allowed to increase.

Soft drinks are currently on the Commerce Ministry’s watch list, which covers 177 products. The watch list is the group of products that need close price monitoring every 14 days. Any price increase needs prior approval from the department.

Of course moron ! Higher prices will fuel inflation !

So, with such twisted logic, it’s enough to forbid higher prices… in order to solve the inflation problem ? Stupid little civil servants (?) and politicians with butter in their brains.

It’s the Zimbabwe path. In this country, people can go to jail if they increase prices… Inflation is illegal. We saw the results. Collapse. And 165 000 % of inflation in one month (read here).

What is the rationality behind the idea of controlling prices of… soft drinks ?

Are Fanta and Coke essential goods, like rice, water and housing ?

Is getting fat by drinking soft drinks a human right ? What kind of degenerated mind can think this ?

It’s the level zero of politics and… civilization.

So what will happen ? The government will continue for a few months this little game… Then at one point… will have to authorize increases of prices… Otherwise businesses will just cut the supply (there is no point to produce something if you loose money on the long term). Dams will break

It’s the inflation tsunami.

Prices controls are wrong, stupid and worse… counterproductive.

But again and over again, the politicians think they’re smarter and stronger than markets laws.

The lesson is going to be painful.

2 Responses to “Soft drinks companies slam prices controls”

  1. 1 Patiwat 4 July 2008 at 3:54 am

    Well considering the Commerce Minister’s intelligence is closely related to a Gay Chimpanzee and our Finance Minister being school in the fine arts of anatomy and not the Austrian school.

    Just hope you saved enough to brace for the impending doom.

  2. 2 fall 4 July 2008 at 6:04 am

    Let’s drink RC cola!

    Is getting fat by drinking soft drinks a human right?
    Is smoking and getting lung cancer a human right? Is drinking fatty soft drinks then get obese and sick a human right?
    IMO, they can do and be damn. As long as they r not going to hospital and using MY tax money to heal themselves from their self-inflict injury.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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