After the spectacular buy-out of the Gillette company to mark a mega merger of two top companies engaged in the manufacture and sale of consumer products for $57 billion , the Chief of Proctor and Gamble A.G. Lafley repeated his marketing mantra "the consumer is the king."

The amount paid by P and G for Gillette is only less than $58.6 billion paid by J.P. Morgan for Bank One in the US last January. The merger of the two consumer product companies has created a conglomerate that exceeds in market capitalisation and revenue than those of the Anglo Dutch giant Unilever. And it may kick off a new round of mergers of major companies in the consumer products industry, reducing the global giants to three or four. P and G had earlier absorbed Clairol and Wella beauty products, famous in their own right.

All this is happening as the competition to lower consumer products prices is becoming more and more intense in the West and the industrial states in general. Top world distributors like Wal Mart in the US are insisting on lower and lower profit margins for the industry. And chief executives, like P and G's Lafley, want to meet the demands of the top distributors keen on low profit margins and higher sales. Wal Mart has been for some years the No1 US company in the list of Fortune 500 companies.

Lafley says: "We want to be consumer-driven and do we do not want to be market-driven." That is what the P and G chief says in a market economy. He wants to please the consumers every way possible and meet all their demands. If such distributors make less profit on a product sold they make up for that and boost the total profits through a higher turn-over.

In the West the markets are driven more and more by the consumers. But in most of the developing countries we have too often a sellers market, a market with high profit margins. And too many of such companies are private limited companies where a few gain by their success.

In the past, it used to be said that Asia is a market for low priced goods, like what the Japanese used to make 40 or 50 years ago, while the US Britain and Germany made high quality and high priced goods, which the poor could not afford.

But now the poor too have become wiser in the developing countries and find quality goods are more economic or durable than shoddy goods bought cheap and discarded quick as they get work out too soon.

The cost cutting in the West is so intense the take-over of Gillette by P and G would reduce their cost by $14 to 16 billion within three years and cut the number workers by 6,000. And now the West has created a pattern of economy in which economic growth increases while the employment does not. Higher productivity takes care of the economic growth without needing additional workers.

While in the West the corporate sector is taking over new companies and making larger enterprises to be more competitive, in Pakistan too many of the industrialists are buying back their own shares from the market. The number of companies which have done that exceeds 30.

They want to keep all the profits for themselves, answer no critical questions at the annual general meetings and do not wish to be responsible to the Karachi or other stock exchanges in case of defaults or mal-practices. With no public? Share holding the Securities and Exchange Commission is less strict when the private limited companies commit follies.

On the other side, the government is creating more private limited companies through privatisation of large public sector enterprises. Dr Hafeez Shaikh has said that eight more mega public sector enterprises would be privatized this year.

Many of them are likely to stay private limited companies as the advantage of going public have almost vanished. Private limited companies are able to get as much loans as they legitimately seek, while the tax advantages too are fast vanishing.

In case of public limited companies also, the shares really owned by the public are often very small in number. The company chiefs not only have the cake but also eat it and then collect awards from the KSE for declaring high dividends to themselves and carry home the honey along with the trophies year after year.

And we are developing a market economy in which instead increasing competition among the manufacturers and then among the traders for producing cheaper and better goods, we have cartel systems of price fixing through mutual agreement or informally through trade associations. We have the system of cartels in operation for long in cement and sugar and many other products where the number of producers or distributors is small.

Look at the manner sugar prices have shot up by over rupees eight per kilo. It was not the result of market forces at work. The hoarders have only cornered the old stocks of sugar but also the 2,50,000 tonnes of raw sugar imported to bring down the sugar prices.

Now, the government is ready for the shock therapy of importing up to one million tonnes of sugar, beginning with 0.2 million tonnes initially. Both refines and raw sugar are to be imported after import duty is lifted and withholding tax is done away with. The government is determined to flood the market with sugar as well as take penal action against the hoarders and price- manipulators.

Traders want a profit of 50 per cent in the turn-over where ever they can. If they are importers the minimum of profit they expect is 20 per cent net. They argue they have to make a number of payments to the corrupt officials who demand Bhatta, apart from paying bribes to the taxation officials, central, provincial and local, including the cops. The visiting World Bank president James Wolfensohn has again spoken of corruption in Pakistan retarding economic growth.

Profit margins in Pakistan are very high in fact, they are the highest in South Asia. Retail profits, too are very high. Vegetable and fruit sellers make a profit of 200 to 250 per cent.

A PIDC peon who had resigned and taken to selling vegetables surprised his former boss by showing a bank balance of Rs75,000 in six months which he could not read.

A former cook of mine came over recently looking very prosperous. He is selling fruits, he said, and makes an average of Rs500 daily, on special days, the profit would be around Rs1,100 per day.

Prime Minister Shaukat Aziz told the Overseas Investors Chamber recently, rather jokingly, that if anyone among them was not making 20 per cent profit he was in the wrong trade. And President Musharraf told the foreigner investors that some of them made up to 50 per cent profit. They could turn around and argue if Pakistani companies could make 100 per cent profit why not they on a level playing field they have been assured.

Most of the time there is no check on the products made in Pakistan. There is no check on the quality of the products or the quantity of an item mentioned on the Carton was there.

Anyone is free to bottle and can or pack anything, put on the market for sale. It is always sellers market and the bottle water is not as safe as it is claimed and yet more companies are coming up with new labels. This is a small country, where price-fixing or operation of cartels is easy. It is Karachi and Lahore plus Faisalabad. A few communities are in the trade, like Memons, Chiniotis and Biharis.

They could meet at mosques and fix prices if they do not meet in the chambers of commerce. Anyone who violates such understanding is regarded as a traitor to the trading community.

Above all, there is no consumer protest or consumer resistance. Often the consumption rises as the prices go up. Unless the consumer wakes up and resists exploitation by trade and industry this practice would continue.

Surely, in the face of such consumption and lack of consumer resistance against the high price and poor quality of the goods, such malpractice would continue. The poor of Pakistan deserve better but the community has to assert itself and try to prevail.