CCPC Consumer Advice Corner
HELLO, I just want to commend you for the good work you are doing in sensitising people about their consumer rights and also promoting competition among traders. Keep up with the same good work. Going back to my reason of writing to you, is there a likelihood of having prices of cement reducing again considering the fact that more players have pledged to come and invest in the cement sub sector? – Mwale from Kitwe.
Hello L. Mwale
Thank you for writing to us. We are always delighted to receive concerns and inquiries from the public concerning the services we render in promoting competition as well as enhancing consumer welfare.
With regard to your question, yes, there is a likelihood of the prices of cement reducing again in the cement sub sector. This is because when more players enter a market, it creates an atmosphere of competition among them. This in turn will cause the players to be more innovative and produce high quality products that will help them stay in the market.
Being innovative and producing high quality products is particularly important for players intending to enter the market and get a fair share. They do this to be able to compete with the already existing players so that they penetrate the market.
Ultimately, this will encourage all players to consider producing high quality products and reduce the price of a given commodity. The more players we have on the market, the more efficient and innovative they become and the cheaper the products. This is because of the stiff competition or level or rivalry among the players which makes them reduce prices in the bid to attract more customers.
It is from this notion, therefore, that if there are more players pledging to come to invest in the cement sub sector, is most likely to cause prices of cement reduce.
In other words, lower prices are more sustained when they are more players in the market.
However, it is also important to note that the price of cement will not only reduce because of the number of players in the market share, it should be noted that other key factors are vital in pricing of the commodity such as efficiency and the quality of a commodity.
Let’s take for instance, a situation where there are three players in the market and only one player is producing a commodity which is of high quality standard whereas the other two are not, most consumers are more likely to flock to where the commodity is of standard. Thus, it is important to note that the standard of a commodity also has an influence when pricing commodities. When looked from the competition aspect, this undoubtedly will enhance consumer welfare.
I hope you find this information helpful.
Please e-mail us on: zcomp@ccpc.org.zm, h.chaaba@ccpc.org.zm. Visit our Facebook page: www.facebook.com/Competition-and-Consumer-Protection-Commission-Zambia or Follow us on Twitter @ CompComZambia. We are at 4th Floor Main Post Office Building, P.O Box 34919, Lusaka. Telephone: 222775/ 222787, Toll-Free line: 5678 across all mobile phone networks.