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The relationship between NTUC & SPH.

The Unions, the Press and the People

Leong Sze Hian & Choo Zheng Xi

Let the people eat…detergent?

Does the media's reporting of detergent prices reveal a deeper conflict of interest that may harm the country?

Once in awhile pearls of wisdom are found in The New Paper. Larry Havekamp a.k.a. Dr Money, in his financial column in The New Paper, likened statistics to bikinis: what they reveal is suggestive, what they conceal is vital (New Paper, May 5).

We refer to the article in the Straits Times headlined "Rice and cooking oil lead price rise: New Case survey of prices across retailers points out cheaper options for buyers" (Straits Times, May 3).

The body of the article stated that:

Its survey showed that NTUC FairPrice had the highest number of cheapest items ranging from shower foam and dishwashing detergent to canned pork luncheon meat and eggs.

For lower-income families, some of the items selected for comparison are hardly appropriate, as they may account for a very small proportion of their total household items expenditure.

In a time when the focus of most families is on basic necessities, we need to ask if goods like salt, shower foam, dishwashing detergent and clothes detergent should be counted in the survey.

One might argue that cleaning clothes is a necessity. However, the magnitude of the weightage accorded to cleaning products is truly surprising: 5 of the 21 items selected for the survey are detergents.

Why do detergent items form such a high proportion, about a quarter of the items selected? Although Singaporeans are renowned worldwide for our cleanliness, one must be obsessive compulsive to spend one quarter of one's household income on cleaning products!

Has a combination of a government controlled press and a government controlled union helped in any way, to glorify NTUC? Unless this is addressed, the people who need cheap sources of necessities most are the ones who may suffer. In the long run, the credibility of the unions, and to some extent, the press may be at stake.

NTUC the cheapest - really?

If we take away the detergents, the supermarket with the highest number of lowest-priced products is not Fairprice, but Sheng Siong with 7 items, followed by FairPrice in second place with 6 items.

If we confine ourselves to just food items, Sheng Siong is also tops with 7 items, compared to FairPrice's 6 items.

According to Case's web site, it's last two price surveys, released on 3 January 2008 (House brand bread survey) and 24 July 2007, showed that the cheapest house brand white bread was at Cold Storage and Shop & Save ($0.0017 unit price (per gram) compared to Fairprice's $0.0019 including the 5% discount), and the cheapest rice (10 kg) was at Giant ($13.95 compared to FairPrice's $16.20).

This means that FairPrice's house brand bread and rice, was 12 and 16 per cent more expensive, respectively.

Even it's earlier price surveys released on 1 June 2007 (Milk and sugar survey) and 14 February 2007, showed that the cheapest milk powder (1.8 kg) was at Sheng Siong ($17.70 compared to Fairprice's $17.90), and the cheapest instant noodles was at Sheng Siong and Giant ($0.95 compared to Fairprice's $1).

So, why are we being constantly told that Fairprice is the cheapest, when even Case's surveys seem to indicate otherwise?

Conflict of interest?

The Straits Times seems to have always given favourable coverage to NTUC.

The NTUC and the government have enjoyed a ‘symbiotic relationship’, to the extent that the Secretary-General of the NTUC sits in Cabinet as a Minister without portfolio.

Similarly, the government has significant influence with the press. This is often taken as a given, but it is important to identify the legal source of the conflict of interest to better understand the issues at stake.

Under the Newspaper and Printing Presses Act, shareholdings in newspaper companies are divided into ordinary shares and management shares. Each management share entitles the holder to the equivalent of 200 votes in the appointment of the board of directors of the newspaper company as well as its staff.

Under Section 10 (11) of the Act:

The holder of management shares shall be entitled either on a poll or by a show of hands to 200 votes for each management share held by him upon any resolution relating to the appointment or dismissal of a director or any member of the staff of a newspaper company but shall in all other respects have the same voting rights as the holder of ordinary shares.

Management shares must be approved in writing by the Minister for Information, Communication and the Arts (section 10 (c) of the Act), and the newspaper companies have no power to refuse the Minister’s approval granting management shares (section 10(2)).

In summary, those who control management shares may have a disproportionate influence on appointing key personnel on the board of directors which oversees the general direction of the organization, as well as disproportionate influence in staffing decisions, which may extend to editorial level.

Who owns these management shares?

A look through the annual report of Singapore Press Holdings in 2007 reveals companies with government links such as Singtel (13.3%), DBS (9.5%), National University of Singapore (5.36%) and yes, NTUC (16.34%) are the owners of such management shares.

A handful of private companies have management shareholding. However, it needs to be remembered that a member of the same Cabinet of which the NTUC head is a Minister either approves or rejects their applications.

In summary, there are two significant conflicts of interest at play here: NTUC’s representation in a government which chooses who can and cannot hold management shares, and NTUC’s significant management shareholding allowing it a large say in the board of directors and editorial staff selection of the Straits Times.

In light of the above conflicts of interest, the extremely positive coverage the Straits Times is giving to NTUC is making both organizations look compromised.

Why it matters to ordinary Singaporeans

TOC has previously pointed out the issues of self-promotion in “NTUC’s $4m gift to less well-off workers”.

As a result of the newspapers’ favorable coverage of NTUC, a family already struggling to make ends meet might end up spending more than they otherwise would. Stories that portray NTUC in a positive light may prevent people from making informed decisions about where to shop.

It is also grossly unfair to other heartland retailers without management shareholding in the national press to compete on this unequal platform. Every positive article on NTUC is essentially free advertising for its brand on a scale which others, like Sheng Shiong could never match.

In a time when every dollar counts, we need free platforms of information devoid of conflicts of interest to tell citizens objectively where the cheapest places to find necessities really are.

Read also TOC's earlier articles:

NTUC's "gift" - helping the poor or blatant exploitation?

5 Minutes With... Leong Sze Hian on NTUC discounts

A brief incident which says a lot

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