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Published on March 14, 2008

The chamber also pointed out that any plan to allow imported goods to force down domestic prices, while benefiting consumers, could be a big mistake.

Such a move could hurt some domestic industries that cannot compete, the chamber said. For such sectors to develop, they need government protection.

The chamber urged the government to help find cheaper sources for raw materials, reduce logistics costs and increase wages, rather than control retail prices.

TCC vice chairman Dusit Nontanakorn yesterday said if private companies were forced to freeze prices too long, their businesses could run into trouble and that could spark a domino effect that would be negative for the economy.

Such a policy could also lead to hoarding and promote artificial shortages.

"The private sector agreed with short-term price controls but the government should seek other means to offset rising production costs to ensure businesses can continue to grow," he said.

If price controls are enforced too long, they are likely to curb production.

Should private enterprises feel the market is unstable, they may reduce production, he warned. In a worst case scenario, they could shut down.

Jit Siratranont, chairman of the retail and wholesale business committee at the chamber suggested the government can help locate cheap raw materials and develop better infrastructure to reduce inefficiency and wasteful costs.

Petchanet Pratruangkrai

The Nation