116,000 commercial fraud lawsuits filed in 2005
CAIRO: The Food Industries Chamber (FIC) will comply with the new Consumer Protection Law despite the strong objections aired by FIC since implementation of the law began in November, FIC President Safwan Thabet said Sunday.
“[FIC] will respect the law because we strongly believe in protecting the consumer, Thabet said in a statement.
Thabet’s statement followed a Thursday meeting with Minister of Trade and Industry (MTI) Rachid Mohamed Rachid and Said El Alfy, head of the ministry’s Consumer Protection Unit, during which Thabet reiterated FIC’s objections that the law puts Egyptian manufacturers at an increased risk of falling victim to frivolous lawsuits.
Since the law went into effect, Thabet pointed out, a LE 2 million lawsuit has already been filed against a major cooking oil manufacturer by a consumer alleging he found a cockroach in a bottle he had purchased. Thabet declined to release the name of the company, but added the law’s effective implementation will be difficult in a market dominated by counterfeit and imitation products.
Minister Rachid, on the other hand, said the law naturally favors the consumer as the weaker of the two sides, while producers can rely on a host of laws which have traditionally protected them.
According to the Federation of Egyptian Industries (FEI), more than 116,000 commercial fraud lawsuits were filed in 2005 against its members. So far, there has been no hint of phasing out the Commercial Fraud Law with the implementation of the Consumer Protection Law of 2005.
FEI launched an attack on the law in early December, calling on the government to rescind it. The organization’s lobbying came after its FIC said, if fully implemented, certain clauses in the law could put many producers out of business.
Ratified in May, the law requires businesses to accept returns and exchanges within 14 days as long as a receipt is presented, and stipulates fines from LE 5,000 to LE 100,000 for violations ranging from refusal to return goods to the intentional sale of defective goods.
The independent 15-member CPU made up of NGO and business community representatives is in charge of implementation in order to address the needs of both businesses and consumers. The version of the law passed last May was noted for increasing the fine range, previously LE 15,000 to LE 50,000, after strong lobbying from NGOs.
Despite the objections of producers, some analysts still doubt the law’s ability to affect real change in favor of the consumer. Magdi Sobhi, economist at Al Ahram Center for Political and Strategic Studies, said it will likely take years before such results can be seen.
“We don t have a tradition of protecting consumer rights, says Sobhy. “I’m still not convinced it will make a difference.At the same time we see the government controlling everything on the political front, it’s hard to see that it will not have a large influence on the economic front. So it really depends on the government s will, which does not stand to benefit from the law.
And while most consumer protection advocates continue to lobby for stronger penalties, some are willing to give the new legislation a chance. Sami Abdel Latif, board member of the Central Egyptian Society for Consumer Protection, says he is satisfied with the law as a first step.
Historically, there has never been a need for consumer protection because the state controlled production and distribution of most goods, he says. Consumers could only resort to the ministries of supply and trade and a few NGOs if they wanted to complain. Now there s a law and consumers are empowered to take their cases to court if need be.
