Prices ‘not just determined by retailers’

Barbados Chamber of Commerce and Industry (BCCI) President James Clarke said the high food prices faced by Barbadians cannot be shouldered by retailers alone.

In last Sunday’s Sun, responding to concerns raised by Kerry Symonds, the senior minister responsible for production, Clark pointed out that many factors leading to inflation were beyond the control of retailers.

“This is something we (BCCI) have spoken about many times before. I don’t know why the issue always comes back to the retailers because there is a chain of links involved in getting the food here,” he said.

“Prices elsewhere in the world go up at times. Shipping costs are still very high… they’ve been going up since May. So all of those factors affect the cost of goods coming into the island. It’s not just the retailers.”

Barbados, like many countries around the world, faces rising food prices, with consumers frequently complaining about the high cost of living. As these challenges continue, the government has expressed concern that some retailers are not doing their best to maintain fair prices.

Foreign Affairs and External Trade Minister Simons called on the public to support those who put consumer welfare first and shun those who do not.

“There is clear evidence that certain sectors of the Barbados distribution sector are manipulating prices and are keeping them at realistic and very low levels. There are also those who are very dismissive of the public…

“The public needs to know who is behaving dishonorably and be able to deal with those people appropriately, while supporting those who are concerned about the welfare of consumers,” he said.

Clark told the Daily Nation that retailers are often portrayed as the ones responsible for setting costs, but the figures on the labels are more influenced by fees tacked on to already high shipping costs.

“Retailers are in the final stages. You have to look at where the food is coming from and where it’s coming from. What’s happening in that market is driving up costs. We know that starting in early May, freight rates went up significantly.

“Once freight rates go up, once the goods reach the port, we need to pay customs duty and VAT and all the freight, excise and all these charges. When freight rates go up, the percentage of VAT and customs duty is calculated on the freight – on the CIF (cost, insurance and freight) value – so the price goes up. When you add on the price, the retailers are at the end of the road,” he said.

Tariffs, VAT, shipping costs and local delivery are all factors that determine the price of goods before they hit supermarket shelves, and Clark says this is something to be aware of.

“It requires the involvement of everyone along the way, from the shippers, shipping, the actual shipping lines themselves, the source markets to the governments that arrive here, and of course the retailers.

“Unfortunately, for a lot of things, we are price takers. If the price of something goes up 100% in another market, we do feel it here, but freight is one of those things that does add a lot of costs,” he added.

George Fortune, who was with his wife at Massy’s supermarket in Warrens, St Michael, on Sunday, said their grocery bills had risen by about 20 per cent in recent years.

“I shop about three to four times a week. On a monthly basis, my grocery bill is about $1,200. It used to be less, but I would say my grocery bill has been high for a long time.”

Another shopper, Rawle Clarke, said his grocery bill had increased recently, but not significantly.

“I think the prices are reasonable, there’s not a huge markup. You might find some things cheaper here than at Popular, and vice versa at Popular,” he said.

Tomilson Bynoe, director of AOne Supermarkets in Carlton, said he was not aware of Simons’ comments but provided some insight into the various factors that influence the retailer’s prices.

“Retailers don’t normally try to raise prices at this time. It doesn’t do us any good. Buying power is still buying power. If my prices are too high then how can my customer base afford to buy things? Every retailer has their own economic micro anomalies in terms of electricity costs, staff costs, packaging costs and revenue cost theory,” he explained.

“I think we have to understand again that we are not the dictators of price. We do not dictate price points. We import everything and therefore most of the prices you see on the shelf carry imported inflation; that is the reality of the world. You can see that prices have moved. The global food pricing net continues to rise,” he added.

Baino, who is also the executive member of BCCI, said the decline in global pricing networks would help ease the pressure on consumers caused by high food prices.

“We can’t discuss this in isolation because everyone has different economics in their respective retail spaces. If corned beef at retailer X is more expensive than corned beef at retailer Y, you can’t assume someone is trying to price gouge.

“There could be a number of factors, including the fact that they can only buy two cases a week due to high demand, whereas another retailer can buy 20 cases a week and negotiate a better price. So you see the pricing difference and assume that this person is doing something unfair to the customer, which is not the case,” Bynoe added.