Singapore consumer watchdog to monitor water price profiteering

Singapore consumer watchdog to monitor water price profiteering

The Consumers Association of Singapore will also step up education efforts to help consumers make informed purchasing decisions, says Minister of State for Trade and Industry Koh Poh Koon.

Tap water (1)

SINGAPORE: The Consumers Association of Singapore (CASE) will monitor for businesses attempting to profit from the increase in water prices, said Minister of State for Trade and Industry Koh Poh Koon in Parliament on Monday (Apr 3).

Finance Minister Heng Swee Keat announced during his Budget 2017 speech that water prices will increase by 30 per cent over the next two years.

“CASE will step up its education efforts to encourage consumers to exercise their choice and make informed purchasing decisions,” said Dr Koh, adding that consumers can give their feedback directly to CASE or through Government feedback channels such as REACH.

The Ministry of Trade and Industry does not see the need to set up a committee to look into profiteering at this point, he said, in response to a question by Member of Parliament Lee Bee Wah.

Said Dr Koh: “Utilities cost, which includes water and electricity costs, accounts for a relatively small share of business costs of firms in the services sector, at less than 1 per cent on average," he said.

Electricity prices are revised every quarter according to prevailing gas prices, which are indexed to global oil prices. "There has been a general decline in our electricity tariffs over the past three years due to low global oil prices. The current electricity tariff is around 16.9 per cent lower than that in the second quarter of 2014," he said.

The Government will continue to monitor the impact of Budget 2017 measures on industries and adjust its support policies if needed, Dr Koh said.

“The most sustainable strategy for businesses to manage cost increases and stay competitive is to transform by upgrading capabilities for higher levels of productivity and innovation."


Dr Koh and Dr Lee later engaged in a back-and-forth over what she described as “a lot of fear among residents that coffee prices might go up” as a result of the water price hike.

“The cost of coffee is not just based on water alone – there are rental costs, workers’ costs, pricing strategies ... Price increases can happen with or without water price increases," Dr Koh said.

“Coffee can be a 3-in-1 or a latte, in between the price range is quite huge. Consumers then have to make the choice to encourage businesses to price their products to be sustainable.”

In response, Dr Lee said: “For those coffee shops in the neighbourhoods, when one increases the price by 10 cents, very soon the rest will follow suit. How will CASE handle this? Will hawker centres set a standard for the price of a drink?”

Such “sweeping statements” are unfair to all retailers, Dr Koh said, adding that if a coffee shop were to raise its prices, consumers can choose not to patronise the business.

He also pointed to media reports citing the likes of Toast Box and Ya Kun indicating they will not increase their prices in the short term.

But Dr Lee said: “From observations in the past, it is quite true when one goes up, the rest will go up. That is the concern, that is why residents are so upset and they worry about increases subsequently in food and drinks.”

Said Dr Koh: “We are making an assumption prices will increase after July, which is in the future. Let’s not prejudge businesses’ behaviour. If it happens then this is where CASE will be avail for feedback to be received.”

CASE president and MP Lim Biow Chuan then reiterated Dr Koh’s point calling on consumers to exercise their right of choice. “If they just pay whatever the coffee shop demands then they are supporting the price of increases arbitrarily,” said Mr Lim. “CASE will continue to monitor prices. In the event one coffee shop raises prices, we would be happy to publicise those that have not raised their prices in turn.”

Said Dr Koh: “CASE as an organisation that helps educate consumers plays an important role in helping consumers understand their purchasing power … and to be able to exercise that. That’s a good signal to the business community to price their products in a reasonable way.”

Source: CNA/jo