Sep 16 , 2023

A rising trend in defective commodities and pretence advertisement has prompted experts at the Ministry of Trade & Regional Integration to prepare a bill aspiring to promote healthy market competition whilst protecting consumers.

They hope to crack down on business espionage that entails unsuited trademark use and the formation of price-setting cartels with strict regulatory oversight alongside the Addis Abeba Trade Bureau and Addis Abeba Chamber of Commerce & Sectoral Association.

The bill has been in the making for the past couple of years, with a consumer protection awareness advocate at the Ministry indicating that reforming the existing trade practices while boosting institutional capacity to enforce the law is necessary to shield consumers from unwieldy practices.

Seifu Ayele indicates consumer protection entails meeting the demand in quality, quantity and prices while empowering buyers' ability to make rational choices. However, he underscores the need for the protection laws to be complemented by administrative legislation.

"Legal remedies are necessary," he told Fortune.

The importance of stringent laws was echoed by Sewnet Ayele, communication director of the City Trade Bureau, who points to an ideological gap between free market thinking and consumer welfare.

"Trade liberalisation needs to be accompanied by an evolving set of laws," he said.

In line with this, the Bureau had forced 59 businesses in the ended year based upon complaints by consumers that reported mislabeled products to return the money to customers.

Officials suggest that measures that stretch all the way to revoking licenses and criminal proceedings will be enforced going forward, as a rising trend of malpractice is observed.

According to Sefalem Aboredah, director of the Consumer Protection Directorate, while false discounts are observed in several real estate companies, furniture stores and boutiques, products under the pretence of known labels and adulterated edible commodities such as honey, butter and dairy products are running wild in the market.

"The profit comes at the expense of consumers," he told Fortune.

Sefalem expects leverages to shift towards customers through the tools available in the draft proclamation.

Ever since the Trade Practices Decree of 1963, Ethiopia has had a law in one form or another to usher in consumer protection that was undermined by sudden shifts in political ideologies.

A publication in African Journals Online pointed out that even though Ethiopia's trade policy has opted for private-sector empowerment, it has been plagued with the risk of unregulated laid-back liberalism. It suggested designing laws and complying with effective enforcement strategies are central to the success of consumer protection.

The last Trade Competition & Consumer Protection proclamation was ratified a decade ago.

While there were close to 400,000 business license registrations last year with nearly half of them being issued online, consumers are feeling the burnt of lax protection law required an amendment following a new Trade Law enactment in 2021.

The 37-year-old Belay Zerihun fell victim to unfair and abusive market practices five years ago when he bought a pair of shoes labelled 'La Coste' for 2,100 Br. The brand had convinced Belay that he was buying original shoes before realising that the shoes had torn open in the middle of the road.

"It shattered in two days," he recalls ruefully to Fortune.

The original pair of shoes Belay thought he had purchased fetched around 4,000 Br on Amazon online. But he insists that it is too difficult to tell them apart turning him timid on purchasing commodities.

Belay attributes the deceiving behaviour of the traders to the lack of proper legal instruments accessible to the everyday consumer. While he welcomes the introduction of a new legal instrument on consumer protection, he stresses that it must enhance the bargaining power of buyers.

Most legal professionals in the country have recognised a legislative gap in consumer protection all with the expansion of a consumer class and the demotion of the Consumer Protection Authority into a directorate within the Trade Ministry.

Yehualashet Tamiru, a commercial lawyer, applauded the revision of the country's consumer protection laws as he believes Ethiopia is striding towards a liberalised and private-led economy manifesting a pervasive policy shift.

He indicated that the new legislation plays a role in evoking legal liability and ensuring consumers' interests are safeguarded. He argued that inadequate market information has subjected consumers to vulnerability and low bargaining power with precarious burdens on the buyer.

"It'll hopefully put a noose on non-compliant businesses," he said.

The lawyer emphasised the necessity of a regulatory framework capable of effective enforcement to provide a wider selection of goods and services at competitive prices.

Yehualashet has observed a failure by authorities to take measures against anti-competitive practices that could pose greater risks to consumers. He recommends programs to enhance consumer education on updated market information to minimise susceptibility to deception and inflated prices.

"Constant market failure can be addressed by targetted legal instruments," he told Fortune.

PUBLISHED ON Sep 16,2023 [ VOL 24 , NO 1220]

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