With 4 months still to go along with a cap on several food and home items on the supermarket, Chairman of the Barbados Private Sector (BPSA) Trisha Tannis is issuing an early warning that the private sector might be hard-pressed to take care of this Compact once it involves an end on January 31, 2023.
The truth is, explaining that the business community continues to grapple with high and rising prices that were out of its control, Tannis said perhaps the time had come for Government to take one other take a look at incoming freight costs, which proceed to be a serious headache for businesses.
Effective midnight March 14, the price of freight was capped at $7,350 per 20-foot container and $8,000 for 40-foot containers, which represented the common costs of freight in 2019. This measure is to last one 12 months.
“So once we get to the top of those initiatives, what lies beyond is something that we want to come back back to the table and discuss. Can we we keep it (the cap on food and home items) for much longer? I don’t think that we are able to. What else may be done is a superb query at this point,” said Tannis.
“The Government is sacrificing as a part of the Compact as well. The time frame that’s about to lapse where they’re going to . . . reevaluate whether or not they will lift the cap that they’ve placed on the inward freight is something that we’ve to look to see what happens there
“We usually are not seeing those freight rates normalise, not back to pre-COVID levels. They’ve abated somewhat relative to 2021, but they’re still excessive, at the very least twice what they were pre-COVID,” she said.
Her comments got here in response to the controversy over whether some supermarkets were adhering to the capping of costs on the 47 items included on a Value Added Tax (VAT)-free list, which took effect at the top of July. In some cases, customs duties were faraway from certain items paving the best way for reduced prices to consumers.
Recently, Prime Minister Mia Mottley disclosed during a press conference that “majority of the persons are working with the costs which were really useful. There are a number of instances – two or three – in some commodities, where persons are still charging more”.
“I suppose people will balance those higher charges with convenience and determine whether that may be a price they’re prepared to pay, especially since in some instances they’re smaller units which will have a limited base,” said Mottley.
Earlier this week, Minister of Elder Affairs and Empowerment Kirk Humphrey noted that he was aware of “a number of the greater stores” where their prices didn’t reflect the commitment that they made.
“I actually have seen it in smaller places as well,” he added.
Nevertheless, acknowledging that price increase was a “sensitive issue” for a lot of residents who’ve been forced to alter their eating habits with the intention to minimise the impact, Tannis dismissed the notion that those involved within the Compact with government to cap the costs weren’t doing so.
“What we’ve seen and what we’ve heard from the retailers which might be party to the Compact is that there have been some shifts in prices but they’ve stayed true to their commitment on those 47 items in relation to freezing the mark-up,” she said, adding that the recently published data from the monitoring mechanism by Government “showed clearly there was broad compliance with the Compact”.
She reiterated that the Barbados Private Sector Association didn’t have control over the informal sector and smaller independent operators and it was possible a number of the continued high prices were amongst those players.
“The signatories to the Compact are the larger players that we’re satisfied represent about 70 per cent market share in Barbados. Nevertheless, we don’t have control over mini marts and other small independent players. We do appeal to them to follow the spirit and intent of the Compact but we actually don’t have control over that sector,” said Tannis.
She explained that while people were quick accountable the private sector each time they see a change in price from one week to the subsequent, it was essential to know that there have been several variables that go into pricing of the products on the shelves including that of freight.
“There are such a lot of other variables that input right into a price, not the least of which is the unique invoice cost of that product,” said Tannis.
“Most notably could be the value of fuel, and that essentially has been the case over the previous couple of months, but we’ve actually, with all the feedback, been continually keeping in touch with the signatories to the Compact and are satisfied that there’s broad compliance,” she said.
She further explained that the private sector “from the onset, made it clear there have been a few things, that while we froze the mark-ups, we had no control over the value of origination”.
“What meaning is that prices are still going to be fluctuating as international prices fluctuate and after all, so long as your inventory lasts. So we set that expectation straight out front. Due to this fact, whilst there’s a targeted price at that time limit, it might have been on a case on all things being equal and continuing,” she explained.