Thursday, November 10, 2011

Kedai Rakyat 1Malaysia - Not Cheap At All

Barisan Nasional leaders should stop propagating misleading claims and making false advertisements promoting how cheap Kedai Rakyat 1Malaysia (KR1M) products are when they are not.
"Items at Kedai Rakyat are markedly cheaper than those in supermarkets and hypermarkets and helps families cut down on their expenses without losing out on quality." The first Kedai Rakyat 1Malaysia was opened by Prime Minister Datuk Seri Najib Razak in June offering goods at 30 to 50 per cent lower than the market prices of similar products. (Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob, New Straits Times 27/8/2011)

Prime Minister Datuk Seri Najib Tun Razak launched the first of many 1Malaysia shops in the country, designed to help bring down the prices of goods and ease the burden of the common man… Najib said the shop retailed 250 grocery items under the brand name “Kedai Rakyat 1Malaysia” at prices 30% to 40% lower than market prices… He said it would also allow the Government to get basic necessities at the cheapest prices from Mydin whenever there were disasters like flood. (The Star 23 June 2011)

Semua kedai koperasi sekolah dan kedai runcit koperasi disaran menjual produk 'Coop 1Malaysia' (Coop 1M) bagi membantu kerajaan mengekang masalah kenaikan harga barang. Menteri Perdagangan Dalam Negeri, Koperasi dan Kepenggunaan, Datuk Seri Ismail Sabri Yaakob berkata, melalui langkah itu, warga sekolah dan ibu bapa mempunyai satu lagi alternatif untuk mendapatkan barangan keperluan dengan harga berpatutan. (Utusan Malaysia 3 November 2011)
Sample product advertisements on KR1M website:


A shopping trip to a local hypermarket such as Carrefour buying products ranging from condensed creamer to canned sardines to dishwashing liquid will immediately show that the truth is far from the outrageous claims made by the Domestic Trade, Cooperatives and Consumerism Minister and the Prime Minister.

While some products are indeed cheaper in the Kedai Rakyat 1Malaysia (KR1M), the price differential is far less than the claims of 30% to 50% for most products. For example, KR1M claim to sell a 425gm can of sardines for RM2.99 “saving” the consumer a whopping 51%. However, a check in Carrefour showed that a 425gm of sardines (Double Swallow brand) sells for RM2.49 or 20% cheaper than in KR1M!

For a 1 litre bottle of 1Malaysia bleach, KR1M will charge you RM1.90, claiming huge savings of 36%. However, one can easily purchase 1 litre of Carrefour or Tesco branded bleach for only RM1.29 or a massive 47% cheaper than in KR1M!

Even when the 1Malaysia products are indeed cheaper, they are nowhere the claimed “savings”. For example, for a 400gm packet of frozen minced beef, it would cost RM4.89 in KR1M. In Carrefour, the Ramly branded packet will cost RM5.29 or only 8% more, instead of the claimed 18% “savings”.

Based on a basket of 23 common daily household goods and food items compiled per the attachment, it showed that if the same items are bought in Carrefour, a consumer will actually save 8%, paying RM120.53 instead of RM130.49 in KR1M. See full product list here.

The manner which KR1M and the Barisan Nasional cabinet ministers have been going to town telling the rakyat how ridiculously cheap the products sold in KR1M is completely irresponsible and misleading. In fact, the Ministers and KR1M should be investigated for breaching the Malaysian Code of Advertising Practice (MCAP). For example, the code says that

“Advertisements should not contain any statements or visual presentation which directly or by implication, omission, ambiguity, or exaggerated claim, is likely to mislead the consumer about the product advertised, the advertiser, or about any other product or advertiser, in particular with regard to… value or total price actually to be paid.”
In fact it is the Domestic Trade, Cooperatives and Consumerism Ministry which is responsible for regulating the industry and ensuring that consumers are not cheated by misleading claims under the Consumer Protection Act 1999. However, when the Ministry itself is guilty of such offences as a result of the Barisan Nasional government’s vested interest in KR1M, then it becomes a gross breach of its responsibility to the rakyat.

We call upon the Ministers and KR1M to stop misleading the rakyat with false advertising and make claims which can only be substantiated with comparisons with products of equivalent quality.

We are very happy if the Government can promote quality products which are cheaper to the rakyat but such promotions should apply to any company capable of delivering cheaper prices and not completely biased support towards 1 company who may or may not offer cheaper prices.

In fact we note with trepidation that the Government is taking the opportunity to force various government-related agencies to take and offer KR1M products – such as the announcement on Coop 1Malaysia in schools and the setup of Kedai Rakyat Majlis Agama Islam Wilayah Persekutuan (MAIWP). We fear that the measures will end up only profiting certain business entities instead of offering real quality products at the cheapest possible prices to the man on the street.
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