The Tribune

EDITOR, The Tribune.

The spectacle of the Price Control Commission (PCC) visiting and demonising businesses in the press has recommenced, but with a twist.

This time, the accusation is food stores have not reduced prices on items that the import taxes were dropped or reduced on as at June 1, 2016.

So the omnipotent PCC (OPCC) is going to solve this by amending the Price Control Act and FORCE merchants to reduce the price of these items.

Most businesses work on a set profit margin but they cannot be expected to reduce the price on inventory that was already on site before the reductions in import tax. Is the OPCC going to refund the taxes paid on the inventory on hand?

Did the OPCC inquire as to how much inventory was on hand before the changes were made so they could judge how long it might be before the reduction in taxes is reflected in the price?

Should the OPCC consider that prices of the goods might have increased so landed costs on newer inventory is higher?

Making accusations intended to embarrass merchants is not only petty it incites some consumers that do not understand pricing mechanisms.

Everyone is a consumer and sees and feels the ever increasing price of goods and services; and everyone also feels the ever increasing burden of higher taxes and regulations by the Government, yet the OPCC remains silent on the latter point. The taxpayer is, as usual, the forgotten man.

In all this though, the consumer is sovereign. They don’t have to pay the price being asked if they believe the store is overcharging. Fascism, or government force, is not the answer, purchasing the item elsewhere is the civilised thing to do.

The only thing price controls do to food items here is cause merchants to increase margins on non controlled items as gross profit is key. In fact it does not even control the rise in prices of controlled items.

Just compare the price of milk or cheese from 5 years ago to today and your answer is self evident.

Price Controls are simply irrelevant in spite of the OPCC’s omnipotence to exert its will by force.

Dr. Walter Williams once noted that “…Despite the disastrous history of price controls, politicians never manage to resist tampering with prices – that’s not a flattering observation of their learning abilities.”

In the final, prices should be determined by the market. A market free of coercion where voluntary exchange takes place. If one party is unhappy about the trade, they can walk away.

Try to do that with your goods at Customs if you think their rate is too high.

But, to paraphrase the Chairman of the Price Control Commission, regardless of the lack of logic, price controls will still be used in this country.

RICK LOWE

Nassau,

June 21, 2016.