The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Retail Grocers Association has not abandoned its push for an increase in price control margins, with its members likely to make a renewed reform push once Value-Added Tax (VAT) implementation is behind them.

Philip Beneby , the Association’s president, said “we will move from there” once January 1, 2015, is behind the industry.

“That is still a work in progress I should say,” he added of price controls. “Because of the implementation of VAT coming January 1, I think we would have to kind of get settled in that regard first, and then we will move from there.

“The margin for price control remains the same, 23 per cent gross mark up. With the 7.5 over the 23, it still holds fast to that, it doesn’t move from that. You can’t move from there. That is something we still want to have dealt with.”

Food industry retailers and wholesalers have been advocating for an increase from the current 18.67 per cent gross margin to at least 25 per cent. The existing fixed gross margin was established in 1971, some 43 years ago, and has remained the same ever since.

It has thus failed to take into account the dramatic increase in labour, utility and other costs that have been imposed on the food retail sector in recent years. This forces businesses to sell non-price controlled items at ever-increasing prices, thus establishing a cycle where rising costs drive consumers to purchase ever-more price controlled items.

“We’re just trying to get settled with VAT first. We need to get through that first, but the price control issue is one we want to have the Government look at,” said Mr Beneby.

He dsscribed the majority of retailers as still being in the “waiting room”. “They are just waiting to see what the government is going to do,” he added.

Mr Beneby said recently that food retailers were backing calls for the Government to revert to VAT ‘exclusive pricing’, as this would provide greater accountability and transparency. The Government’s original VAT legislation, released in November 2013, had opted for ‘exclusive pricing’ where the product price and amount of due tax were shown separately on the label sticker.

It, however, reversed this position in the legislation that passed through the House of Assembly.