Influenced by the conflict in the Middle East, the prices of some raw materials have surged. The cost of petrochemical products, such as gasoline and plastics, has risen sharply, leading not only to higher prices for everyday plastic packaging materials, but also potential shortages.
For example, the packaging for white rice has doubled, with the unit price of a 3kg vacuum-sealed bag rising to NT$8 from NT$4. As a result, manufacturers have indicated that the retail prices of white rice might be raised accordingly.
Such reasons for price hikes might seem reasonable at first glance and consumers might be willing to accept them. However, what is concerning is the possibility that businesses might take advantage of the situation to raise prices excessively.
From a cost-analysis perspective, a 3kg bag of packaged white rice averages about NT$250, with slight variations depending on the grade of rice. The cost of the vacuum-sealed packaging accounts for only about 1 to 2 percent of the retail price. In other words, even if the price of the packaging doubles, a reasonable increase in the price of the entire back of rice should only be about NT$5 — which would likely be acceptable to consumers.
However, businesses might deliberately mislead consumers by claiming that because packaging costs have doubled, the retail price of the entire bag of rice must rise by a similar proportion, despite the cost of the rice itself not changing.
If this is the case for white rice, other everyday goods — including food and beverage items — would likely also increase in price.
Add that to gasoline prices rising by more than NT$3 for two consecutive weeks and it is likely to drive up the consumer price index, significantly straining household budgets.
The Fair Trade Commission should pay close attention to developments to prevent price gouging.
It is common for small restaurants and bakeries to increase prices in increments of NT$5 or NT$10, with increases often exceeding 10 percent.
However, the cost of the plastic bags used for takeout account for an extremely small share of the total and do not justify price hikes.
Price increases driven by external, objective factors are understandable, but their extent must adhere to the principle of proportionality. A reasonable adjustment should be based on the proportion of packaging costs within the product’s total cost, using that share to estimate an appropriate increase.
Chen Wen-ching works in environmental services.
Translated by Kyra Gustavsen
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