CWE supplier selection system scrapped

Rishad & Gamini bulldoze a Lankan supply monopoly grip overnight

• ‘No special preferences!’-Rishad
• ‘Selection Committee next week’–Gamini 
• CWE supplier selection system scrapped
• New system in place next week
• ‘Ready to listen-call any time’-Rishad

In a major development in Sri Lanka’s wholesale market pricing-and thereby the critical Cost of Living-the country suddenly routed a tight grip held on the sole and apex wholesale market entity by a select group of suppliers so that budgetary relief finally reaches the consumer -and a powerful Lankan retail supplier collective of large capacity that was excluded from the supply chain promptly lauded the government for opening the supply chains far and wide at last, as revealed on 11 February in Colombo. “Only last night I came to know about this limitation faced by our wholesale suppliers. Today we scrap the previously appointed (only) five supplier team that undertook to supply to the entire country through CWE. Instead, we open the supply chain to a larger number-more than 70 wholesale suppliers present here” announced Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on 11 February.

Minister Bathiudeen and Gamini Jayawickrama Perera (Minister of Food Security) were addressing a packed gathering of more than 70 top national level, large-scale, wholesale suppliers to Co-operative Wholesale Establishment (CWE-SATHOSA) under the Ministry of Industry and Commerce. CWE is the main government corporation that intervenes in the control of prices of essential consumer items in the market. CWE can also import and distribute commodities to stabilise prices. When no reasonable price is offered for local produce, the CWE purchases products directly from producers and distributes to consumers. CWE’s pricing mechanism is also the prime mover of cost of living in Sri Lanka sitting at the very heart of retail goods prices of Lankan consumer market. All other retailers -including all supermarket chains- determine the shelf prices of goods for sale based on the price list determined by CWE, on a weekly (at times on a daily) basis after competitive procurement. However, Lankan wholesale suppliers were distressed due to the recent decision to purchase goods from only five suppliers instead of its large pool of 71 registered (and many other unregistered) suppliers.

“From now onwards I and Minister Jayawickrama will both work together to make HE the President Maithripala Sirisena vision of good governance and transparency to prevail in the consumer market” said Minister Bathiudeen, and added: “The relief given by the interim budget by Finance Minister Ravi Karunanayake has helped to greatly ease the cost of living of the people. But some retailers have not reduced the prices yet. Today we like announce of a new initiative to control prices by next week-in that to correct this, we will bring back the transparent tender system starting next week. Today we scrap the previously appointed (only) five supplier team that undertook to supply to the entire country through CWE. Instead, we open the supply chain to a larger number-more than 70 wholesale suppliers present here-so that a the benefit of a wider supplier participation will relieve any monopoly control and bring government’s budgetary benefits to the Lankan consumer at last. Only last night I came to know about this limitation faced by our wholesale suppliers and that is why I called all of you and I thank you for coming here at short notice. As committed suppliers to Sri Lanka, please support us in this regard so that we can pass the relief to our consumers immediately. Both myself and Minister Jayawickrema are open to you always-and ready to speak to you any time of the day on your issues. We are also removing all the intermediary committees for different product sectors since we find that retail prices tend to go out of control.”

“Minister Rishad and I want to implement this together since we believe that it is very important that budgetary relief by our government reaches our consumers. We came to you on a pledge of good governance and we will fulfil this” said Minister Jayawickrema, and added: “We also request you to report the daily retail market prices of goods to our operations room directly.  We are appointing a committee to review the CWE supplier list. From now onwards, we also want to meet you face to face on a monthly basis to address your issues. Both Minister Bathiudeen and I are open to you always and ready to speak to you any time of the day.”

A first ever direct meeting of this nature with essential and retail suppliers to entire Sri Lankan market, this unprecedented event by two top Cabinet Ministers on 11 February at CWE’s Vauxhall Street head office was immediately welcomed and praised by most suppliers who were present on the occasion.

Nihal Seneviratne (Essential Items Importers Association of Sri Lanka-EIIASL) addressing the Ministers said: “We thank both Ministers for this initiative. Wholesale supplying is highly competitive in Sri Lanka. But now the retails prices have gone out of control.”  EIIASL led by Seneviratne supplies more than 90% of imported products on wholesale to the country’s retail network.

“We are very happy” declared an enthusiastic Wimal Fernando (Treasurer-SME Industry Association of Colombo District under National Chamber of Commerce and Marketing Executive, Harsha Travels and Tours as well as supplier of sweets/confectionaries to SATHOSA) addressing the Ministers, and added: “Meetings between Cabinet Ministers and Market Suppliers should be held regularly. In fact the last meeting of this nature was held under Minister Jeyeraj Fernandopulle (around 2004)! This is the first time we are able to speak to you directly since then.”  Fernando has a record of continuously supplying to SATHOSA for almost twenty years.