29 October 2003

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Placing the consumer as the market priority

Finance and Economic Affairs Parliamentary Secretary Edwin Vassallo speaks at the recent ‘Consumer Empowerment: Benefits to Consumer and Traders’ seminar organised by the Consumer and Competition Division in collaboration with LACORS (Local Authorities Co-ordinators of Regulatory Services). Following are extracts from his speech.

The consumer market is constantly on the increase and therefore the Government is working hard with both consumers and entrepreneurs to strengthen Consumer Rights.
The priority in today’s market economy is the consumer. The commercial system is regulated in such a way as to serve the consumer. The law that regulates the duties of entrepreneurs is in fact the same law that governs the rights of the consumers. Intrinsically, the law that regulates the rights of consumers also regulates commercial activities and this is a result of the fact that the market economy is built on the principle that whoever is in commerce must be able to supply the latest product and service at the best price to whoever needs it.
In Malta we have a number of laws that regulate consumer rights. The enforcement of these laws is monitored by the Consumer Competition Division.
Nowadays, the officers of this division are leaders in their field and are amongst the most important speakers in this area. I am pleased to say that they are constantly being trained so that they may be able to fulfil their duties in the best possible way.
May I add that the interests of the consumers are the same as those of the entrepreneurs. The two interests are not conflicting; on the contrary, they complement each other. I am stressing this because I do not want anyone to continue to think that the interests of consumers run contrary to those of whoever is in business.
I am convinced that a lot of valid work has been carried out by the Department of Consumer Affairs, but we cannot continue to develop this work if there are still workers in this sector who remain of the opinion that we can only strengthen consumer rights by creating tension between the consumers and the shop owners. This attitude does not make sense and we must fight this prejudice. We must also try to fight any prejudices that owners of businesses may in turn have against consumers.
With regards to the work carried out by the Consumer and Competition Division, I would like to refer to the synergy exercise that is being carried out between this division, the Commerce Division, the MSA and the Market Surveillance. This is being done because, as a Government, we want to continue to improve the structures that allow us to support the business sector. This allows us to achieve a sustainable economy and creates more employment. This is already being done by Governments of member states of the European Union, and, in the same way, Malta must start to improve the services it offers in the Internal Market.
In order to have a viable Internal Market we must have structures with people who are capable of listening, understanding and helping all those involved in entrepreneurship. However, the internal market does not only consist of the businessman, but also of the consumer. Therefore, improvements in the Internal Market must not only be geared at the entrepreneur but also at the consumer. The development of the market is in the interest of each department and therefore of each official. Nowadays every person involved in this decision-making process is starting to realise that he or she can rely on the support of his colleagues, even those who work in different entities within the structures built to assist the Internal Market.
In order to reach this synergy, and to have the consultation structure fully functioning by the end of November, every effort is being made to have continuous dialogue between the officials who will be representing their Departments in meetings abroad. Further talks are being held amongst those members who represent their Department on local committees, and also amongst the high officials of these entities, who are meeting regularly to allow each official to be kept informed of the work and objectives of the respective Departments. I will also be in direct contact with each entity so that together we may develop and implement a working plan with the following objectives:
• That each entity may work to improve the conditions of the entrepreneurs
• That there may be a reduction in bureaucracy
• That more and better information may be provided
• In this way each entity will be working individually and yet in synergy with the other departments. I am convinced that in this way we will be improving not only the conditions for investors in our market, but also the services being offered to consumers. This working plan is being prepared and will be implemented in the shortest time possible. At the same time, the implementation of this plan will also facilitate the implementation of the European Charter for SMEs.
I am already working in collaboration with the Consumer Division to develop a system that goes beyond what is required from these entities by law. In this way, the work protected by this entity will be stronger and will reach its fulfilment.
This working plan will allow the Consumer Division to remain in the forefront in the protection of consumer rights, and I propose that the objectives of this work be the following:
• Education towards a culture that recognises the importance of the protection of consumer rights. This education must be carried out in schools, on the media and with the business sector.
• A continuous analysis of the effectiveness of the laws that govern both consumers and competition.
• Work to develop interest in creating more consumer groups
• A continuous analysis of the work of the Departments forming part of the Commerce Division, the MSA, and the Consumer Competition Division in order to analyse the efficiency with which customers resorting to these departments are being served
• A continuous analysis of the prices of essential products and services, with the publishing of reports showing how these prices are fluctuating.
• An analysis of the social effect that consumerism is leaving on the Maltese society
• An analysis of the changes in spending and other consumer trends
• An analysis of the efficiency of the service offered by Authorities and Departments to their clients
• According to the Household Budgetary Survey 2001, the total disposable income of the Maltese families, is around 1,050 million Maltese Liri per annum. This is an average of 8,202 Liri per family. According to this survey, the average family is made up of three members.
If this disposable income is spread over the population, the average disposable income per person is around Lm2,722.
These figures give an indication of the size of the Maltese market. This means that if the Maltese people spend all their net income, the potential of the Maltese market in 2000 was of Lm1,050 million. However, apart from this figure, in order to more accurately calculate the Maltese consumer market, one must also add the amounts spent by the Government, businesses and foreigners on Maltese consumer products.
As you may see, work in this sector is vast but interesting. I hope that this work will provoke further realistic discussions in the market. Not discussions where one side is working against the other, but talks in which the two sides may work together. For this reason we are also striving to have more entrepreneurs as members of business groups, and in the same way we must strive to have more consumers forming part of consumer groups.
I am satisfied that I am co-ordinating this work, I am also satisfied that I am working hand in hand with the officials forming part of this decision-making process, and for this reason I am confident that together we will be able to improve the services offered to our market. In this way, Malta will have a market that is capable of fulfilling the demands of the consumers, while creating opportunity for sustainable commerce and investment in this

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Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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