The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to “let market forces prevail” and “keep its hands out” of private businesses, amid suggestions that Price Control is seeking greater powers of intervention.

Rupert Roberts, SuperValue’s president, and Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, said competition was the best method for keeping consumer prices keen and affordable.

The duo were speaking out after Price Control Commission chairman, E. J. Bowe, suggested the Price Control Act will be amended to force companies to reduce product prices in line with import duty reductions and exemptions.

Such a measure appears designed to ensure businesses pass reduced/eliminated taxation on to Bahamian consumers in the form of reduced prices, but many in the private sector will likely view the proposal as a further example of Government over-reach.

They are likely to perceive it as tantamount to unwarranted interference and intrusion into the affairs of private companies, and their freedom to determine their prices, margins, revenue and profitability.

Mr Roberts told Tribune Business that his supermarket chain automatically reduced prices on products where import duties were reduced or eliminated, adding that he preferred ‘competition’ over government action to drive adjustments.

“The only thing is that it should be competition, not government action,” he said. “If somebody is selling something for 50 per cent less, they’re the ones who are going to sell it, and the higher-priced one is not going to sell it in this environment.

“The ones that want to be competitive jump on the bandwagon, and do what E J Bowe is trying to do by legislation. I’d rather do it voluntarily than by legislation.”

Mr Roberts added that the Government needed to be “careful” when contemplating the intervention sought by Price Control, but said he did “have a problem with forcing” recalcitrant merchants to pass on the benefits of tax cuts.

He disclosed that whenever import duties were reduced, Super Value typically placed its existing inventory of the impacted products on ‘special’, thereby ensuring it was rapidly cleared to make way for the new, lower-priced goods.

Mr Sumner, the Chamber’s chief executive, said the private sector organisation unaware of the legislative intervention being proposed by the Price Control Commission, which threatens to further undermine investor confidence and the ‘ease of doing business’.

Consumer prices have increased following Value-Added Tax’s (VAT) implementation last year, and Mr Sumner called for a balance to be struck between business and consumer needs.

“We have to let those in the retail sector, especially those in the food sector, have a chance to keep prices at reasonable levels so they can turn a profit, but also at a point where it remains affordable for the consumer,” he added.

The best way to achieve this, Mr Sumner said, was to allow market forces - especially competition between business rivals - to work, as this would keep prices keen and ensure companies operate efficiently.

“It’s really a case for market forces to prevail,” he told Tribune Business. “It’s the kind of thing where we appreciate that the Government has to have some level of oversight for businesses operating in the country, and we don’t want to see companies operating in the informal economy, but we also don’t want to see the Government’s hands in private business.”

Mr Sumner argued that the Government’s primary role was to provide the enabling economic environment in which Bahamian and foreign-owned businesses could flourish and provide employment, while providing regulation and oversight where necessary.

“It doesn’t mean they ought to be getting involved in private businesses,” the Chamber chief reiterated. “We would want to see market forces prevail, and competition increase, and then prices will get to the place where they are more affordable and services more efficient. That’s all the price control we need.”

Mr Sumner said he was unsure whether the proposed legislative changes proposed by Mr Bowe had the support of the Government, or if they were merely something the Commission was assessing itself.

“When it comes to the ease of doing business, we’ve been working very hard at the Chamber to reduce impediments to business and streamline the taxation environment for businesses to operate in,” Mr Sumner added.

“Anything that threatens that work, the Chamber is not necessarily going to resist, but it’s going to have some concerns about it.” He said any expansion of Price Control’s regulatory interventions needed to be discussed between the Commission and BCCEC, with the Consumer Protection Commission also needing to be involved.