Monday, April 25, 2011

Toilet Roll Economics

Now I get it – the economic significance of the modest bog roll.

The penny dropped (I’m sure there’s a pun in there somewhere) when I read the puzzling case of Frank-Michael John. This still-wet-behind-the-ears far-left German politician has had his pretentious name entered in the records of his local polizei for stealing toilet rolls.

Janitors at the gents of the Stralsund town hall in Northern Germany became suspicious when no amount of upset tummies could account for the use of 200 rolls in a very short time. So they set up a sting operation to trap the poo-paper pilferer. He was caught not so much with his pants down, but leaving the loo with one roll in his hand and another in his back-pack.

Well, if the man has to resort to a back-pack instead of a briefcase as becomes a successful politician, then he probably has every excuse to lift the loo paper. He could certainly benefit from a sabbatical to South Africa where his peers here could show him how to become a minute multi-millionaire without really trying.

Toilet paper is precious stuff – as I recently discovered. I was totally engrossed in some or other TV documentary when I was irritatingly interrupted by a loud and lengthy lament on the very same subject from my companion who is responsible for the strictly budgeted grocery purchases.

“Look at this,” she wailed while thrusting a nine-pack under my nose. “This used to be R26! Now it is R55!” My attention was still captured by the awesome power of tectonic plates that the TV narrator was trying to explain, so my response was muted at best. I certainly wasn’t horrified enough to show even the slightest empathy with the plight of the purchaser, so amenable conversation was abruptly obstructed. (There must be a pun there too.)

I really don’t know why the producers of toilet rolls don’t learn from the chocolate-bar guys – just make it smaller and print the length or weight in a size 3 font while keeping the same wrapping.

Many years ago before all the SABS marks guaranteed everything and nothing a friend of mine owned a small paper processing plant in the Eastern Cape. His main line was cheap toilet rolls that threatened the user with permanent damage if he or she had anything even bordering on diarrhoea. Clive (that’s not his real name) was also a heavy drinker, and soon his habits began to flush away his profits.

After one or two price increases to subsidise his lifestyle, he decided he would have to cut factory costs. First he tried reducing the length of the roll but there was a limit to avoiding the obvious. Then he devised a much more cunning plan (alkies know how to do this!). He calculated that by shaving a few mm off the width he could save far more paper than by reducing the length. After a few months he had to do it again…and then again. It was only a matter of time before either his liver packed up or his customers refused to accept his calculator rolls. It was both.

Overbergers must be full of it or more regular than most. The price of toilet rolls is often the topic of heated discussion about what they perceive to be the inflation myth that Stats is trying to sell. Scepticism is heightened many-fold when you throw in coffee, sugar, veggies, and especially mutton or beef into the jabber.

Part of me then wants to do the noble and perhaps courageous thing and defend the data crunchers in Pretoria. I can recall the days when I broadcast a 3 minute Sunday news insert called “Econovision” which in response to viewers’ letters would try to break things down to early teen comprehension. With inflation hovering at 20%, more often than not the subject was pricing and inflation. I would go to great lengths to defend the data gathered from thousands of points, the internationally approved expertise required to process them, the different rates for different income groups and regions, and of course, emphasise the fact that the rate is only an average and cannot be applied definitively to each individual or household. I would keep on reminding the disbelievers that a drop in inflation did not mean a drop in prices, merely a slowing down of price increases.

Nothing has really changed, except perhaps the intensity of scepticism and my waning zeal to defend the official figures. Quite frankly, the 4.1% CPI increase they have just announced is way off my own experience. And I thought I was average! The “average” experience I seem to share with my fellow senior citizens is the squeeze on income from declining interest rates, and a much more costly number 2.

Apart from academics and banking economists, it seems that the only people taking the official inflation stats seriously are the monetary authorities. “Let them eat credit” appears to be the approach while sending out confusing messages about South Africa’s low personal saving levels. For most, the official stats present little more than an irritation at being reminded of the latest bog-roll price. It certainly has no effect on the unions and wage demands – especially in the public sector.

Here’s a thought: if Stralsund and Swellendam share a common fixation with toilet rolls, we could replace the Economist’s “Big Mac” price parity measure with the price of one roll of double ply. The mind bog-gels.

I’ll be watching this space closely. When next I get comfortable and reach out for the baby soft two ply only to find patches of two-by-fours cut from the Cape Times or the local knock-and-drop, I’ll know it’s time to seriously review the grocery budget.

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