Ignatius Pereira

Traders say response from council positive

‘Prices slashed to end the unhealthy competition’

KOLLAM: The All-Kerala Gold and Silver Merchants Association has approached the World Gold Council (WGC) for initiating measures against unhealthy competition among gold retailers in the State.

A spokesman for the association told The Hindu that the response from the council was positive.

The decision to move the council was taken at the executive committee meeting of the association in Kochi on January 8.

The spokesman said that as a result of the unhealthy competition, the association was compelled to fix daily retail gold board rates in the State lower than the wholesale rate.

The spokesman explained that on January 7, while the board rate in the State was Rs.1,565 a gram, the Madras Jewellers and Diamond Merchants Association (MJDMA) had fixed it at Rs.1,575.

On January 8, the rates were Rs.1,550 and Rs.1,565, respectively. On January 13, it was Rs.1,550 and Rs. 1,569 a gram.

The value-addition charges came to 10-12 per cent over the board rate — at 4 per cent profit taken by the wholesaler, 4 per cent commercial tax and the balance as profit to the retailer.

The unhealthy competition had resulted in a section of traders making claims of levying only 4-7 per cent as value-addition charges.

On January 11, the board rate was Rs.1,570 board rate and the wholesale rate, Rs.1,653.12. At 10 per cent making charges, the retail price was Rs.1,727.

The association’s decision to slash the price was with the aim of ending the unhealthy competition especially among seven or eight traders that was virtually wiping out small and medium gold traders. Such slashing of prices could even call into question the quality of the metal sold.