Friday, November 11, 2011

KR1M not a house brand?

I was personally very flattered to read that my first article as a columnist for the Malaysia Chronicle, "Who is the one short-changing Malaysians - BN or Pakatan",had garnered a response from Mohd Zain, the Secretary-General of the Ministry of Domestic Trade, Co-operatives and Consumerism. This is the fastest I've seen the civil service react to anything I've put out, so once again let me express my gratitude.

What the Secretary-General has completely missed is the entire context of my comments about Kedai 1Malaysia (KR1M). First of all, for the Minister Ismail Zabri to mention that some items were "up to 50%" cheaper, is misleading in itself. This is a common ploy used by supermarkets and video stores. You can go up to a pile of DVDs which say "up to 70% off" but find the ones actually worth watching only 10% off.

When the Minister and the Prime Minister had announced the entire KR1M concept which would aggressively combat against rising costs, and mentioned that they would have 250 products available, naturally one would assume that we would be able to save a couple of bucks. However, by coming out and trying to 'clarify' the nature of the comments, I would submit that the Minister has misled the public with his "up to 50%" comment.

Furthermore, the statement failed to actually cite examples as to the products which were actually 50% off! What is more puzzling is that there was no attempt to establish what the benchmark prices are in the first place. Could it be that discounts are based on Recommend Retail Prices (RRP) of certain products? Is the Minister unaware that hypermarkets and supermarkets offer discounts of RRP items on a daily basis? If so, how are the 'discounted' prices found in KR1M any different?

Let's talk about his claim that KR1M products have to be compared against similar branded products, but not house brands. So then, what's the point? I can buy Dettol if I could afford it rather than house brand disinfectant. Or I could buy Coca-cola rather than Tesco cola. This is on the basis that I have a choice as a consumer to purchase items as according to my budget.

But isn't the point of KR1M to save money? How then can your KR1M brand, which is obviously a house brand, not be compared to other house brands? This in itself defies logic. Who defines 'similar branded items' anyway? Is there any assurance that the quality of the KR1M brand is better or exceeded the other so-called 'similar branded items'?

It has just been reported that items found in KR1M are suspect for quality. Tony Pua, who was one of those responsible for uncovering the scandal in the first place, today announced that fresh milk had been sold at the stores contained E. Coli, and was backed up by Dzulkefly Ahmad. Furthermore 8 items out of the 250 had been found to contravene the Food Act 1983 and the Food Regulations 1985. How can the Minister defend this, especially as the Ministry is supposed to overlook the operations of KR1M directly?

Lastly, the RM40 million subsidy paid for CAPEX purposes for refurbishment and upgrade of the premises. Let's look at the numbers. According to their website, there are currently six KR1M stores in operation, with the latest one to open is in Melaka.

With an announcement of 22 more stores on the way, this brings it up to 28 stores. With a RM40 million subsidy, the cost of renovation for each store would be RM1.4 million worth of renovation for each store. I'm sure the crony-contractors would be rubbing their hands with glee. Having been to the KR1M located at the Kelana Jaya LRT station, I can confidently say that the renovation would certainly not cost that much. This is the Ministry, once again, pulling a fast one on us.

Since I have the government's attention, and they are so keen to read my columns, can the Defence ministry explain about the Skudai land deal? Can the MACC let us know why they are so keen to investigate Petronas but not the National Feedlot Centre? Or get the right people from the Port Klang Free Zone? Can the Ministries give explanations about the sheer incompetence in procurement, as the MACC has declared there was no corruption involved?

Khairy Jamaluddin has fed us with a true cock-and-bull story today, by saying that the Rakyat's money is well spent when invested into a condominium. If it was such a good investment, why didn't they proudly shot about it before? Stop being so bitter about the opposition holding press conferences to talk about their achievements when it is clear that Barisan Nasional is doing very little to do things right. While you're at it, stop trying to feed us lame excuses by calling them clarifications.

Here is the original letter from the Ministry is below:

From: Datuk Mohd Zain Bin Mohd Dom <>
Date: Fri, Nov 11, 2011 at 7:42 PM
Subject: "BN is the one short-changing us, not PR" dated 10 November, 2011.

Dear Sir,
I refer to the issues raised on Kedai Rakyat 1Malaysia which appeared in the article entitled "BN is the one short-changing us, not PR" dated 10 November, 2011.
It is important to acknowledge the fact that when the Minister of Domestic Trade, Co-operatives and Consumerism spoke of savings up to 50% on KR1M products, never did Dato' Sri Ismail Sabri Yaacob at any time state that it was 50% cheaper on ALL the 250 items. Rather, his statements had been consistent in that KR1M products are being sold at prices cheaper by certain percentage margins up to a maximum of 50%.
Additionally, the price comparison alluded to by Dato' Sri Ismail Sabri is between KR1M products and similar branded products in the market place, and not with house brand products of other hypermarket players.
As regards the RM40 million, the money is used for CAPEX purposes, inter-alia, to refurbish and upgrade premises that had been identified and selected for KR1M operations.
Thank you.
Mohd. Zain bin Mohd. Dom
Ministry of Domestic Trade, Co-operatives and Consumerism

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