Venezuelan Price Enforcer Busts Businesses for “Unjustifiable” Price Hikes

Head of the Institute for the Defense of People's Access to Goods and Services (Indepabis) Eduardo Saman has reiterated calls for businesses to abide by price regulations and refrain from misleading customers, after penalties were imposed on a number of businesses this month.

By Ryan Mallett-Outtrim - Correo del Orinoco International

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President of Indepabis, Eduardo Saman (AVN)
President of Indepabis, Eduardo Saman (AVN)
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According to Saman, the consumer protection agency found one business increasing prices of imported merchandise by more than 200%, while failing to inform customers that the products had been purchased with dollars issued by the Commission for the Administration of Currency Exchange (Cadivi).

Speaking to Tves' TV Foro program on Sunday, Saman stated that the business, Pablo Electronica C.A had been found by inspectors to be imposing “a monthly increase of 5% to 10%” on prices of Panasonic goods. These rises often exceeded monthly inflation rates. The highest level of monthly inflation since 2008 was recorded in May, at 6.1%. Since then, inflation has declined each month.

Saman stated that one Panasonic television on sale at Pablo Electronica had a marked price almost four times its original value. According to Saman, inspectors found that the TV had been purchased with dollars from the now defunct Transaction System for Foreign Currency Denominated Securities (Sitme) last December, at an exchange rate of 5.30. The retailer would have paid around Bs1500 for the TV, which was found by inspectors on sale for close to Bs13,000.

Even taking into account “operating costs” for the retailer, Saman argued that “the cost of the TV should be Bs3400.”

Saman further stated that Pablo Electronica had allegedly failed to notify customers that some products had been purchased with government issued dollars.

“It didn't say anywhere that any of the property was acquired with Cadivi dollars. It was the first finding, for which [Pablo Electronica] was fined,” Saman stated.

Then on Monday, another business was fined by Indepabis.

Indepabis coordinator for Inspection and Supervision in the Capital District, Carian Garcia told AVN that an outlet of retailer Compumall had been found applying allegedly “misleading” labeling on some products. Garcia stated that investigators found that Compumall had imposed “unjustifiable” increases in the marked price of some school supplies.

“We have been evaluating the prices of products such as notebooks, pencils and other school supplies...but there is a variation between [prices in] June, July and [last] September; why does this happen? These are old products that were purchased in January or February,” Garcia stated.

“This is unjustifiable stuff we're punishing,” he said.

According to Garcia, Compumall also used prohibited modes of labeling such as stickers attached to products, instead of stamping or marking a price directly on the merchandise.

“There are books which had their price tags removed and replaced with higher ones, due to the season,” he stated.

Garcia warned that the retailer had been given “24 hours” to rectify the price discrepancies. He also stated that the bust came during a one day crackdown on school supply retailers across the capital.

However, these aren't the only businesses under renewed scrutiny from the agency. New Indepabis staff will be permanently stationed at two of Venezuela's largest international airports. On Sunday, Saman announced that Simon Bolivar International Airport at Maiquetía and La Chinita International Airport in Maracaibo will both receive new permanent inspectors as part of a push to strengthen consumer protection during the holiday season.

“We have a permanent presence in Maiquetía and La Chinita; we are overseeing airlines, delayed flights, overbooking of tickets,” Saman said.

During the Tves interview, Saman also issued a warning to restaurants nationwide, urging owners to ensure they are listed in the national registry system, and display accurate prices at the door.

“The restaurant must be registered... to avoid being penalized,” Saman stated. He also warned hotels to ensure they honor bookings and are receptive to customer complaints. Saman said that members of the public have already contacted Indepabis complaining of hotels canceling bookings after payment has already been made by the client.

Indepabis Restructure

While Saman indicated that his agency will be increasingly active over the holiday season, his agency has itself been undergoing restructuring since June.

On 9 June, authorities reported they had allegedly uncovered an extortion ring operating within Indepabis in Caracas.

On 14 June, President Nicolas Maduro announced that Indepabis would be overhauled.

After being appointed to head Indepabis with a mandate to eradicate corruption in the body, Saman has since stated that the first phase of internal assessment has been carried out, and an action plan is currently being developed. This follows the high profile “relaunch” of Indepabis on 20 June, when Saman stated that the agency will focus on collaborating with Cadivi to tackle illegal price hikes by retailers.

In July, however, Saman had his authority to appoint Indepabis directors revoked by the commerce minister Alejandro Fleming, after he fired numerous regional heads.

At the time, Maduro urged Saman to negotiate with Fleming, and to “stay firm in the fight against the mafias who cause shortages”.

“We came to an institution that was hit by corruption...an institution that was very run down, especially morally. When I arrived, we made across the board changes, nationally and regionally.  It's like rebuilding a body to be able to walk,” Saman said on Sunday.

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