The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A FOOD store retailer says The Bahamas is becoming “a dictatorship” after the Government sought to expand the price control regime to a further 38 products without industry consultation.

Cyril Carey, manager of Kenneth’s food store, told Tribune Business he felt “disrespected” by the Davis administration imposing these changes on his business and the wider industry without warning.

“I was in a Zoom meeting with some of the other food store operators a few days ago and we are deciding what we are going to do,” he added. The options being considered ranged from legal action to not carrying price-controlled items that retailers would have to sell at a loss, and Mr Carey added: “It is a consideration right now, but I know because we have a lot of inventory just sitting there that we will need to sell. We may have to ride it out until all of that stock is gone.

“A bit more consideration needs to be taken by the powers. We are really seeing it hard in business, but everybody feels like because it’s a cash-type business that we make so much money. Everything is about turnover and we’re paying a lot of bills. We have electricity bills and staff to pay along with business license fees.

“Everything is going up. Sodas prices just escalated in September. Every shipment that comes in you are seeing a new price,” he added. When you look around the store, nearly 50 percent of what we carry was already under price control. Now they want to talk about feminine napkins and baby formula? This is looking like we are living in a dictatorship now.”

The extent of the price control regime’s expansion was unveiled in the Price Control (Application to Additional Items) Regulations 2022, which are due to take effect on Monday, October 17, and last for at least six months until April 17, 2023. The Prime Minister, in unveiling the move last week, said it was for a six-month trial although there is every possibility it may be extended further.

Wholesale margins, or mark-ups, are capped at 15 percent for all 38 product line items listed, while those for retailers are set at 25 percent across-the-board. Those goods impacted, some of which are already price controlled, are baby cereal, food and formula; broths, canned fish; condensed milk; powdered detergent; mustard; soap; soup; fresh milk; sugar; canned spaghetti; canned pigeon peas (cooked); peanut butter; ketchup; cream of wheat; oatmeal and corn flakes.

The remainder are macaroni and cheese mix; pampers; feminine napkins; eggs; bread; chicken; turkey; pork; sandwich meat; oranges; apples; bananas; limes; tomatoes; iceberg lettuce; broccoli; carrots; potatoes; yellow onions; and green bell peppers. The regulations were signed on October 12, the same day as the Prime Minister’s speech, by the minister responsible for consumer protection, who is Michael Halkitis, minister of economic affairs.

The retail mark-up for eggs appears to have been increased from the present 10 percent to 25 percent, providing a very modest boost for retailers. But, while the 25 percent maximum across-the-board mark-up is slightly higher than the “general” 23 percent permitted currently, retailers said the increase was insufficient to offset the expansion of price controls to more products.

The price control regime’s expansion effectively means merchants and wholesalers will be selling more of their inventory as ‘loss leaders’ where they are unable to recover their cost of sales.

The consequences will likely involve merchants further raising prices on non-price controlled goods, thereby further feeding already-high inflation. And it also provides a disincentive for retailers to stock price-controlled items, which could result in a shortage of such products.