The declaration of retail prices should be automated

24/ 09/ 2021

Business complains about the complex and time-consuming mechanism of declaring an increase in retail prices, which is currently proposed by the State Service of Ukraine on Food Safety and Consumer Protection. According to the EBA member companies, it now takes about 2-3 minutes to declare a change in the price of one product. Given the wide range of products in retail outlets, we estimated that that one employee would spend time equal to three working days a week to declare prices for the socially significant goods. And to process the change in prices for anti-epidemic goods, the pharmaceutical market representatives need to spend from 7 to 50 hours a day and use specialists with pharmaceutical education. It will be recalled that for a year and a half business has been obliged to declare an increase in retail prices for goods of significant social significance and anti-epidemic goods at the request of CMU Resolution №341. At the same time, the prices are set and changed by suppliers (namely, distributors and manufacturers), while retailers only make a markup on the purchase price. Depending on the percentage increase in price, retailers are allowed to sell goods 3, 14, and 30 days after declaring the change in price. And this is another point that business would like to draw attention to. As a consequence of such a declaration, there can be difficulties with the availability of medicines, antiseptics, disinfectants, and personal protective equipment in pharmacies. This is due to the deadlines that must be met after declaring new prices for goods. That is, within 3, 14, and 30 days after declaring the change in price, the pharmacy has no right to sell these goods at new prices, but in fact, is forced to put them in the warehouse. Based on the analysis of the next arrivals of medicines, the EBA companies-members note a daily increase of the prices for 200-1000 medicinal drugs in pharmacies. Therefore, in order to process a huge workload of declaring changes in commodity prices, it is necessary to involve additional employees. The situation is similar to retail prices for socially significant goods as it is complicated by the fact that certain products have a short shelf life. In this regard, the EBA experts consider it necessary to reduce the time of sale commencement of such goods after declaring a price increase, in order to avoid a shortage of goods subject to regulation. Also, according to business representatives, it is necessary to revise the List of socially significant goods by separating goods of the higher price segment, as well as goods whose price has not increased by more than 5% for the entire period of Resolution №341. The business considers it necessary to increase the efficiency and convenience of the price declaration process. In view of this, the EBA appealed to all parties involved to consider amending Resolution №341 and the declaration procedure as a whole. According to the business, these are the priorities: Reduce the period by which the business entity can start selling the goods to 3 days after the declaration; Automate the transfer of information to the site where the price declaration is made; Change the format of the declaration so that it is possible to declare a change in price for several or all facilities (establishments) of the retail network (if they have the same retail price), and not to submit a separate declaration for each separate retail establishment; Review the List of socially significant goods and exclude the goods that actually belong to the higher price segment, as well as goods whose price did not increase by more than 5% while the Resolution is in force. The EBA experts are ready to join the development of the automated declaration process in order to avoid violations of the requirements of the Resolution and to prevent shortages of socially significant goods and medicines for patients with COVID-19. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

According to the EBA member companies, it now takes about 2-3 minutes to declare a change in the price of one product. Given the wide range of products in retail outlets, we estimated that that one employee would spend time equal to three working days a week to declare prices for the socially significant goods. And to process the change in prices for anti-epidemic goods, the pharmaceutical market representatives need to spend from 7 to 50 hours a day and use specialists with pharmaceutical education.

It will be recalled that for a year and a half business has been obliged to declare an increase in retail prices for goods of significant social significance and anti-epidemic goods at the request of CMU Resolution №341. At the same time, the prices are set and changed by suppliers (namely, distributors and manufacturers), while retailers only make a markup on the purchase price. Depending on the percentage increase in price, retailers are allowed to sell goods 3, 14, and 30 days after declaring the change in price. And this is another point that business would like to draw attention to.

As a consequence of such a declaration, there can be difficulties with the availability of medicines, antiseptics, disinfectants, and personal protective equipment in pharmacies. This is due to the deadlines that must be met after declaring new prices for goods. That is, within 3, 14, and 30 days after declaring the change in price, the pharmacy has no right to sell these goods at new prices, but in fact, is forced to put them in the warehouse. Based on the analysis of the next arrivals of medicines, the EBA companies-members note a daily increase of the prices for 200-1000 medicinal drugs in pharmacies. Therefore, in order to process a huge workload of declaring changes in commodity prices, it is necessary to involve additional employees.

The situation is similar to retail prices for socially significant goods as it is complicated by the fact that certain products have a short shelf life. In this regard, the EBA experts consider it necessary to reduce the time of sale commencement of such goods after declaring a price increase, in order to avoid a shortage of goods subject to regulation. Also, according to business representatives, it is necessary to revise the List of socially significant goods by separating goods of the higher price segment, as well as goods whose price has not increased by more than 5% for the entire period of Resolution №341.

The business considers it necessary to increase the efficiency and convenience of the price declaration process. In view of this, the EBA appealed to all parties involved to consider amending Resolution №341 and the declaration procedure as a whole. According to the business, these are the priorities:

Reduce the period by which the business entity can start selling the goods to 3 days after the declaration;
Automate the transfer of information to the site where the price declaration is made;
Change the format of the declaration so that it is possible to declare a change in price for several or all facilities (establishments) of the retail network (if they have the same retail price), and not to submit a separate declaration for each separate retail establishment;
Review the List of socially significant goods and exclude the goods that actually belong to the higher price segment, as well as goods whose price did not increase by more than 5% while the Resolution is in force.

The EBA experts are ready to join the development of the automated declaration process in order to avoid violations of the requirements of the Resolution and to prevent shortages of socially significant goods and medicines for patients with COVID-19.

Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.