24 March 2020
Let market forces and price changes put a stop to panic buying, says Tim Quilty
Liberal Democrats Member for Northern Victoria Tim Quilty has declared that market forces are the solution to the panic buying of staple goods.
Mr Quilty believes that with demand for certain goods skyrocketing, the market response of increasing prices to match demand would put a stop to empty shelves and shoppers fighting over basic goods.
“What we have been seeing in our supermarkets and shops is not only somewhat disappointing, it also shows what happens when prices are not adjusted to meet and limit demand,” said Mr Quilty, a former accountant.
“The economic principal of demand and supply says that if demand for a product increases dramatically, then the price of the item goes up to a point where the demand is reduced because people are no longer prepared to pay as much. At the same time supply increases as producers rush more to market.
“I have been seeing news reports of shoppers’ trolleys full of toilet paper, of shoppers screaming at each other and fighting in the aisles, and of buses of metropolitan residents descending like vultures on regional communities.
“Many shops have reacted by rationing the number of products that people can buy. People react badly to prices rising in times of shortage, but they also react badly to empty shelves. I believe there could be a better middle way.”
Mr Quilty suggested a modified pricing mechanism where the first one or two samples of an item would be sold at a standard price, then subsequent samples would be more expensive, making the bulk purchase of a particular item more and more unattractive.
“If two packets of dried pasta cost a dollar, a third packet might cost $2, then $4 for a fourth, then maybe $8 for a fifth packet,” Mr Quilty said.
“This increasing scale would ensure everybody could afford to continue their regular shopping but would discourage the bulk buying which is clearing our shelves.
“And it would eliminate shop staff having to risk their personal safety by having to remove items from people’s baskets at the checkouts, and the arguments which may result from that.”
Mr Quilty suggested that part of the additional revenue could be used for community benefit.
“As well as paying premiums to suppliers to increase production, supermarkets could put part of the extra takings towards supporting the more vulnerable in the community, so that shoppers won’t feel like shops are taking advantage of this coronavirus crisis.
“These are unique times and we all need to be patient, considerate, and exercise some creative thinking to get us through this crisis.”
For more information, contact Graham Springett | 0408 208819