The worldwide oil crisis in the early 1970s resulted in double-digit inflation in Singapore. The people's fear of a global food shortage encouraged merchants to hard essential goods just so they could jack up prices to make higher profits in quicker time later. To counter these unethical practices, the National Trades Union Congress set up the Consumers Association of Singapore. While its work did improve the situation, it was not effective enough. So, NTUC set up NTUC Welcome Consumers' Co-operative Limited.

Shortly afterwards, two large unions - Singapore Industrial Labour Organisation and Pioneer Industries Employees' Union - also set up cooperatives and operated supermarkets. In 1983, they combined to form Singapore Employees Co-operative Limited, a second merger followed with Welcome to form NTUC FairPrice Co-operative Limited. This year, FairPrice celebrates its 30th anniversary.

In December last year, NTUC FairPrice Co-operative Limited organised its annual Free Used Textbooks Project for the 20th year. Last month, it presented study grants worth $268,000 to more than 200 children. It is the 18th year that FairPrice was helping to take some of the load off less well-do-do members.

These are just some social responsibilities that FairPrice has been carrying out as a committed corporate citizen.

Apart from organising charitable activities, it has also come to the aid of the community in times of need. In the last 24 months, it has slashed prices on its basket of 200 essential items and added another 600 items to its. Just as FairPrice absorbed the 3% Goods and Services Tax on the items in its low-price basket during the initial months when the tax was introduced in 1994, it absorbed the 18% GST increase that started on 1 January 2003 for all goods sold.

From February, the 1% GST increase continued to be absorbed on the 800 essential items, a move that will cost FairPrice $5 million this year. FairPrice has also given away $1 million worth of vouchers to 84 Citizens' Consultative Committees to help cushion the impact of the GST hike on needy families.

FairPrice has definitely gone beyond its founding mission to help moderate the cost of living for low-income households in Singapore, and is making a difference in the local community.

To understand the relevant of FairPrice, we must go back in time - to the late 1960s, shortly after Singapore gained independence, when everyone was trying to live more comfortably and making a quick buck was the order of the day.

It was the rampant practice of unscrupulous trades to tamper with their weighing machines, mix food quality and sell their wars at exorbitant prices. To check these malpractices, National Trades Union Congress set up the Consumers Association of Singapore in 1971. But, countering profteering needed constant pro-active mass support. The creation of a consumer cooperative was proposed, and Case helped to lay the groundwork. For its management to know the wholesale price and profit margin, the cooperative must be profitable. It would set benchmark prices for its goods and force its competitors to reset theirs.

First Shop

NTUC Welcome Consumers' Co-operative Limited opened its first supermarket in Toa Payoh in July 1973. On opening day, hordes of people overcrowded the store, forcing the management to shut the doors every three hours or so to allow those inside to finish their shopping and leave, before another group of shoppers could be let in. But, beyond the opening frenzy, Welcome needed the regular support of shoppers to effect larger turnover. The cooperative offered annual dividends for its members who only needed to buy just one $50 share.

Rice War

By 1976, there were seven Welcome supermarkets altogether. Food prices had gone up about 49% between 1972 and 1973. But with Welcome supermarkets moderating prices, food prices dropped 6.4% in 1976 compared to 1975. Before farmers learnt about advanced agricultural technology, there used to be poor harvests once every years, resulting in food shortages and a surge in food prices.

In 1975, Welcome started importing rice from Thailand, keeping a stockpile of not less than 900 tonnes. Welcome sold rice at 10% to 17% cheaper and profiteers were forced to lower their prices.

Then, Welcome cut a deal with neighbourhood shops to carry basic items and earn commission for their sale. For recognition, FairPrice shop signs were put up. This scheme proved so popular that by 1982, there were 1,050 FairPrice shops.

But, with the merger of Welcome and the Singapore Employees' Co-operative Limited in 1983, the FairPrice shop scheme was dissolved and a new cooperative was formed.

Milestones

• In 1985, FairPrice launched its house brand products. The cost savings on no frills packaging and advertising resulted in FairPrice's ability to offer a better deal to customers. Currently, there are more than 800 house brand products.
• In 1991, FairPrice became the first supermarket chain in Singapore to introduce bar-coding which effected shorter customer waiting time and higher productivity.
• In 1998, Liberty Market was introduced to meet the needs of savvy shoppers. Today, there are stores with Australian, Thai and Peranakan themes.
• In 2000, Cheers, a 24-hour convenience store was introduced. The aim is to open 100 outlets. There are now 34.
• In 2001, a POSB centre was opened within the premises of the FairPrice supermarket at Hougang Festival Market. Currently, 70% of FairPrice supermarkets have ATMs installed.
• In 2002, FairPrice was one of 50 Super Brands chosen by the Business Superbrands Council to be featured in its book.
• In 2003, FairPrice opened its Fresh Food Distributuion Centre - a first for a retailer in Singapore to build, own and manage its own refrigerated distribution facility for temperature-sensitive, fresh and chilled products.

With a staff strength of 4,000 and sales exceeding $1 billion, it is no surprise that some quarters have accused FairPrice, with more than 100 stores, of bullying Small and Medium-sized Enterprises.

NTUC Deputy Secretary-General Matthias Yao, in explaining the relevance of NTUC cooperatives in the present marketplace, recently said they are in the business to check profiteering and to let workers enjoy products and services at affordable prices.

"This naturally puts pressure on the other companies doing similar businesses," said Mr Yao.

In 1973, then Prime Minister Lee Kuan Yew, at the official opening of the first Welcome supermarket, suggested to small shopkeepers to pool together their resources and set up their own supermarkets. His suggestion is still relevant as bulk buying would reduce costs and cost savings means consumers can get better value for money.

"Closing the co-operatives - and FairPrice - will not make life easier for the local businesses," said Mr Yao. "Unless the SMEs can get their act together, it will be the big foreign player who will come in to fill the gap. Local businesses will be no better off, and workers will be worse off."

In its success, FairPrice remains committed to setting benchmark prices for essential items. It will also continue to strive to deliver the bet quality product and service as it reinforces itself as Singapore's Very Own Supermarket.