11 July 2001
The Price Club saga has been going on for months now with creditors still in the dark about the fate of their money and employees not knowing what will happen to them.
There have been numerous meetings between the operators and the creditors in a bid to solve the impasse. However, the situation does not seem to have gone better. Shelves at Price Club supermarkets are still empty and customers are disappearing by the minute.
There has been talk of new investors stepping in to pump new cash into the chain. At one point undisclosed foreign investors were having talks with the Price Club operators but these do not seem to have progressed much. Only last Sunday, our sister newspaper MaltaToday revealed that Maltese company Andrews Feeds expressed an interest in buying the Price Club chain.
The story has no end in sight but one thing is certain Price Clubs demise may have negative reverberations on the Maltese economy. The chain employs around 600 people and a lot of suppliers and importers depend on the chain for their livelihood. The larger suppliers, although able to go ahead without the Price Club are still owed millions.
The impact on the economy at large has prompted government officials to intervene into the matter. A meeting was also held between the creditors, the Price Club operators, the Prime Minister and other government officials in a bid to avoid any catastrophic closure.
The Malta Business and Financial Times delved into the issue of government intervention and spoke to the GRTU Secretary General Vince Farrugia and Labour Party spokesman Leo Brincat.
Both of them explicitly say that the Price Club saga does not concern government. Mr Farrugia reiterates that it is the market that has to establish how the Price Club scenario will be solved.
"You either believe in competition or else you do not. I do not agree with government intervention," Mr Farrugia adds.
Mr Brincat is prompt to agree with the GRTU supremo. "The Price Club issue does not concern government as much as it concerns the creditors," he says.
Mr Farrugia points out that the market is adapting to Price Clubs demise. "Supermarkets and mini markets all over the island are picking up clients and trade that once belonged to the Price Club chain."
He continues, "a lot of people have risked with the Price Club
chain and business tells you that who dares wins. But there
are times when you lose. That is how the market operates."
"The foreigners will have a monopoly in the sector and if they decide to import their own goods they might even threaten local suppliers and importers," Mr Farrugia explains.
Mr Brincat is more cautious in his approach. He explains that selling Price Club to a foreign entity will create a precedent in Malta.
The opposition spokesman insists that the GRTUs legitimate concerns should be listened to. "I think the GRTU should be consulted on the matter if a foreign investor is going to get involved," Mr Brincat says.
The dominant position of a foreign investor is a deja-vue for Mr Farrugia. "We had raised our concern years ago with the Office of Fair Trading over the growth of Price Club. The chain was a dominant player in the field, however our concerns were turned down. We do not want the same to happen if a foreign company comes into the fray," Mr Farrugia warns.
He insists that the country cannot afford to threaten the livelihood of thousands of employees simply to save the jobs of a few hundred people.
Mr Farrugia concludes that "past mistakes should not be corrected
by making more mistakes." According to him, bringing over a foreign
chain would simply destabilise the local market and that would be a
mistake too far.