KUALA LUMPUR: Puspakom, Padiberas Nasional Bhd (Bernas), Pharmaniaga Bhd and MyEG Services Bhd have been identified as monopolies and are currently being reviewed by the government, according to Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail.
He said a special task force had been set up to study the monopoly of some businesses and services that could have contributed to the high cost of living in the country.
“A lot of sources are being controlled by some individuals and big companies. The government is looking for ways to spur businesses towards healthy competition in the market,” Saifuddin said at the MIDF Group luncheon talk on the rising cost of living today.
Puspakom handles the testing of all vehicles, while Bernas is responsible for the import and distribution of rice in the country. Pharmaniaga makes and supplies pharmaceutical products to government hospitals. MyEG is an e-government services provider.
He said the task force would make recommendations on the four companies to Cabinet.
Saifuddin said the government believes that the increase in the cost of living was partly contributed by resources being controlled by a small group of individuals and big conglomerates.
He explained that there were three main elements in assessing monopoly issues, including the relevance of the policies that cause the creation of these monopolies, the size of their investments and the impact to the economy.
“We haven’t submitted our recommendations to the Cabinet on the four companies,” he said.
Last year, a special task force was formed - headed by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali - to look into alleged monopoly claims in business and services.
The other ministers who are involved in the task force include Transport Minister Anthony Loke, Health Minister Dr Dzulkefly Ahmad and Agriculture and Agro-Based Minister Datuk Salahuddin Ayub.
Saifuddin pointed out that the committee was still discussing the matter and looking at various options.
“Recommendations on whether we would dismantle the monopolistic businesses or allow them to continue could be among the options. We are still at the discussion stage,” he told reporters on the sidelines of the event.
The committee will continue to look at other businesses which are monopolistic that fall under their respective ministries, Saifuddin added.
“Monopolies are not necessarily bad, but the ones that are bad are those inhibiting their competitors, manipulating prices and controlling supply,” he said.
An economist said that reviewing businesses would be positive to spur competition in the market.
“The government broke up Telekom Malaysia Bhd’s monopoly in the broadband market and that has seen an adjustment in prices and is expected to intensify competition in this space,” he said.
He also pointed out that the government would be looking at elements of oligopoly.
An oligopoly is a market structure where the business is dominated by a few giants.
On the government’s approach to reducing the cost of living, Saifuddin said reviewing businesses and services was the long-term approach by the government in tackling the escalating cost of living in the country.
“We are also looking into short-term measures such as targeted fuel subsidies, cooking oil subsidies, food banks and unlimited ride passes for public buses and rail services.”
On the targeted fuel subsidies, Saifuddin said the government has identified the vendor and hopes to implement it in the next two months.
“We are going through the list of the recipients and so far, have about four million people.
“We think the list could be shorter after we review it with 17 agencies,” he said.
Saifuddin said that wages and salaries were not the only solution to ease the cost of living, but that businesses must also look into innovation and technology to address the income and productivity issues.
