By YOURI KEMP
Tribune Business Reporter
Consumer protection regulators have confirmed there is no “price gouging” on eggs despite complaints that costs have doubled in just two weeks.
Danny Sumner, the Price Control Commission (PCC) chairman, told Tribune Business that an egg shortage in the US has resulted in cost increases that are being passed on to the main egg importer, Bahamas Food Services, and local retailers.
“We have already did our initial investigation when the outcry came out,” Mr Sumner said. “The inspectors were in full force and checking the other items in the food stores, and then the eggs came on afterwards. The first problem we had was with the hand sanitiser, alcohol and the Lysol.
“Moving forward we knew that eggs were the main topic prior to the alcohol and Lysol shortage, and what we have discovered was that the market price for eggs in the US - and when I say the US, from New York all the way down to Florida - went up dramatically.
“What we also discovered is that there is still an egg shortage in the States; throughout the States. The farmers that supply eggs in the US have marked up on their prices, and that price has been handed down to wholesale suppliers here in The Bahamas. The biggest supplier of eggs in The Bahamas is Sysco, which is Bahamas Food Services, and another company called Phoenix.”
Mr Sumner added: “Our inspectors, along with myself, we also went to Super Value as well. We went and obtained the invoices from the States showing the prices of the eggs, and we verified that their invoice indicates that there was a mark-up increase.
“That increase then was channelled down to the retailers, so what you saw in the food stores and the convenience stores were the mark-up prices that were handed from the wholesale suppliers. In some cases it might have been between 60 percent to 80 percent [increases], and maybe even 100 percent.
“The people who were in some of the stores that had older shipments; an older inventory of eggs, were still selling their eggs at over $2. When that inventory was depleted, people went back to the stores on the next day and saw the price went from over $2 to now over $5,” Mr Sumner continued.
“That was because the old inventory with that regular price was finished, and the retailers had to go to the new price which reflected the increase. So, hence, there was no gouging going on.”
Acknowledging it is “unfortunate” that Bahamian consumers have to face such “extremely high” prices on eggs, Mr Sumner added: “There is nothing the retailers or the wholesalers could do. It’s just one of the situations where the demand for eggs in the US probably helped escalate the mark-up increase of the eggs.
“We also discovered that the prices you see in those food stores right now on eggs, the retailers are not making not one cent of profit from those eggs. We had a meeting, and Mr Roberts from Super Value said he is not making any profit on eggs at all.”
Mr Sumner continued, “In addition to that, eggs carry a duty which is 30 percent. Then there is 12 percent VAT, so you are looking at 42 percent on eggs when they are landed. The controlled mark-up on eggs is 10 percent, so you are looking at 52 percent right off the top for eggs before they get to the consumers in the market.
“The egg prices that you see right now are because of the demand for it in the US, but I can assure you that the prices that the retailers are looking at in the stores is in standard with the PCC. There is no gouging going on, I can assure the public of that. There is no gouging going on. It’s just that it is something we have to endure until the coronavirus situation mellows and the eggs prices will drop, but for the time being it is going to be like that until the situation warrants better.”
Mr Sumner’s assertions back comments by Philip Beneby, head of the Retail Grocers Association, who on Friday told Tribune Business “there’s no price gouging on eggs” despite increases of “more than 100 percent” over the past two weeks.
He explained that demand in the US and other countries amid the pandemic was “driving up the cost” of this food staple, and warned that hard-pressed Bahamian consumers - many of whom have lost jobs and/or income due to COVID-19 - that “there’s no relief in sight” on egg prices which may well further increase before they decline again.
Mr Sumner, meanwhile, backed calls by Herbert Styles, former president of the Consumer Protection Association, for the list of price-controlled breadbasket items to be expanded. He said: “I totally agree with him. I have a number of things right now that I would propose to the Government, but I am waiting for the right time.
“We had a situation with Hurricane Dorian. There might have been some gouging going on, but we knocked that down. The price list right now as it is, we have a price list and an extended price list that we call. We have some things that I would like to personally see on the extended list and the breadbasket list, especially vegetables and fruits.
“As a matter of fact, all fresh vegetables and fruits should be on the price controlled list, mainly due to the fact that we have a produce market which is BAMSI (Bahamas Agricultural and Marine Sciencs Institute), which produces some vegetables and what not, but how efficient that is to supply the whole Bahamian market? I don’t know,” Mr Sumner continued.
“But we still do a lot of heavy importing on produce that is needed, and these are healthy things that people consume on a daily basis. All of these things should be on the breadbasket items, and that would include avocado pears. We import a lot of avocado pears, and I don’t know why. We still are importing onions, even though we get onions from Exuma and in Andros, but hopefully down the the Ministry of Health, Ministry of Finance and the Commission can come to some agreement and provide more - and better - things on their breadbasket items.”