The price stability agreements signed between the government and individual importers will simply lead to an “explosion of prices” in March.
The stern warning was made by medicines importer and President Emeritus of the Chamber of Commerce Reginald Fava during TV programme Reporter on Monday.
By signing these voluntary agreements with the government, private operators have bound themselves to keep prices fixed in the six months between October and March.
But according to Fava, after the “price freeze” is lifted in six months, prices will rise suddenly. “There will be an explosion in prices. Instead of rising gradually prices will increase all of a sudden.”
The veteran businessman and lobbyist described these agreements as “unacceptable”.
“In the past we had an imposed price freeze. Today we have an agreed price freeze, that is the only difference.”
Fava also augured that the price freeze will not be extended, as happened in the past. “I do not think that we would repeat what happened in the past when the price freeze was extended year after year.”
In his reply to the budget speech, Opposition leader Alfred Sant also expressed concern of an explosion in prices in March, hinting that a Labour government will seek to extend these price stability agreements by another two months to ensure that adequate regulatory mechanisms are in place before the full shock of euro adoption is felt.
Fava also defended medicine importers from “politicians who blame them for rising prices”, arguing that the price increases are imported from abroad.
“Medicine importers are acting just like the government who had to impose the surcharge to compensate for the international hike in oil prices.” Fava said.
Fava did not exclude the possibility that some importers could be artificially inflating their prices, but he insisted that the Chamber of Commerce, rather than the state, should control abuses.
He also expressed his reservations on the Pharmacy of Your Choice scheme, which will decentralise free medicine distribution from government to local private pharmacies.
While acknowledging that this would have advantages for the consumer, Fava reprimanded the government for not consulting with the stakeholders and for offering a “pathetic” remuneration to pharmacists. “It was all made in a big hurry without adequate consultation with those who would run the scheme… The amount offered to pharmacists for each patient participating in the scheme is pathetic and will not cover the expenses involved.”