The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A CABINET minister yesterday confirmed the expanded price control regime will be implemented from November 1 even as the Government awaits proposed revisions from the food distribution and pharmaceutical industries.

Michael Halkitis, minister of economic affairs, said before the weekly Cabinet meeting that the Government is still waiting on the Retail Grocers Association (RGA) and Bahamas Pharmaceutical Association (BPA), together with wholesalers in both industries, to submit their suggestions on how the original price-controlled lists and mark-ups/margins should be adjusted.

Enforcement of the expanded price control regime, first unveiled by the Prime Minister earlier this month, has ultimately been pushed back by two weeks from the original October 17 target after the affected industries argued they needed more time to consult their members and adjust systems and business models to the new requirements.

Tribune Business understands the Retail Grocers Association is aiming to submit its proposal, which would drastically cut the original list of 38 product categories, by today so there is time for further talks and the exchange of more proposals and counter-proposals ahead of arriving at a “compromise” both sides - as well as consumers - find acceptable in the battle against the cost of living crisis.

Mr Halkitis, who yesterday said he would not characterise this two-week period as a way to facilitate negotiations with the private sector, said: “What we have done is not gone to full enforcement of the of new orders yet.

“In our meeting with the retail grocers last week Monday, and as well we had a meeting with pharmacy retailers as well as pharmaceutical wholesalers this past Friday, where they expressed similar sentiments about notice and being given an opportunity to make the adjustment.

“Of course, they did not agree with the new margins. But we stress to them that this is a temporary measure in the first instance that we will review afterwards. And we committed to look at some other things that impact their business. So what we have agreed, the retailers did ask for an extension to the 28, which is this Friday, in order to get us some suggestions on how we can, you know, achieve what we’re trying to achieve, ie bringing down prices, and minimise the impact.”

Disclosing that he has yet to receive the food industry’s proposal, Mr Halkitis added: “Beginning November 1, we will expect that the new margins will be in effect in the retail pharmacies as well as retail stores..... We’ve sent out a statement - it’s November 1. We wanted to be able to say that we gave time for the adjustment. Ideally, the businesses requested, you know, there’ll be consultation beforehand but we think that this is an adequate adjustment period.”

The Government previously said the expanded price control regime for both industries is a temporary measure. For food retailers and wholesalers it will last six months until May 1, 2023, while for their pharmaceutical counterparts it will remain in effect for three months until February 1, 2023. Both deadlines can be extended.

Asked about the imposition of penalties and sanctions on businesses that fail to meet the November 1 implementation deadline, Mr Halkitis said: “There are various penalties within the law, but what we want to do is have an opportunity to have people comply, and failure to comply, then there are other monetary penalties. But the idea is that we’re not coming down with a heavy hand, so to speak, or sledge hammer, but we just want to ensure that the regulations are being met.

“And we think that this time it will be approximately two weeks since the amendments were made that we will be doing the enforcement, and we think that’s adequate time to make the adjustment. And as we said, in the first instance, it’s a temporary measure.

“We understand everything that the businesses have told us about the potential impact on their bottom line and the cost, and how it’s affecting everybody. But what we stressed as well is that the Government has made some efforts on its behalf. And this is an effort to ensure that the things that we’re doing trickle down and reach the actual consumer who is the target.”

Food 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.

Price-controlled mark-ups range from 15 percent to 18 percent for pharmaceutical wholesalers. For retailers, the range is from 35 percent to 40 percent. The medicines covered include vaccines, anti-diabetic drugs, decongestants, laxatives, contraceptives, antacids, anti-hypertension medicines, cough preparations, cardiovascular agents and serums.