The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Breadbasket items will undergo a “major price adjustment” in the coming months due to the Central Bank’s plan to end the Bahamian one-cent coin’s use as legal tender, a key regulator said yesterday.

Danny Sumner, the Price Control Commission’s chairman, told Tribune Business it will examine the effects this move will have from a “pricing perspective to make sure the consumers are protected at all times”.

He added: “When it comes down to volume, one cent can go a long way. Let’s say, for example, they sell a product at any given store and they sell 500 of them a week or a day, and there is an additional cent or two added on to that particular item.

“A one-cent on a particular product means a lot, these things add up. So Bahamians need to be fully aware when it comes down to pricing in the store and what they pay for and, whether it be produce, food or clothing, it is critically important.”

The Central Bank previously said it had already “alerted” the government’s consumer protection agencies, including the Price Control Commission, to the issue of whether additional rules are required for the “rounding” that will be necessary with cash-based transactions after the one-cent ceases to be legal tender come year-end 2020.

The Central Bank’s current “rounding” guidelines for cash payments, where a consumer bill does not end in zero or five cents, stipulate that transactions ending in the digits one or two will be rounded to zero; those ending in three, four, six and seven will be rounded to five; and those ending in eight or nine rounded up to ten.

Mr Sumner, meanwhile, noted the possible effect of this on breadbasket items that are price-controlled by the government through statute law. He said: “I think from a pricing perspective we have to look at that because we have a price index where these merchants have a ceiling they can go up to, but cannot go over.

“So it is up to how we deal with it. We are going to make it in a way where the merchant doesn’t have an advantage. From what I can see I think all of those breadbasket items, looking at the price index I have in front of me, a lot of them will be impacted heavily when the elimination of he penny comes into effect.

“We’ll determine moving forward how we can effectively put in a proper price index for those items that are controlled by the government. By the time the one-cent will be eliminated we would have made a major adjustment to the price index.”

Kevin Demeritte, a Central Bank spokesman, said the regulator was only concerned with what consumers are paying at the cash register, not the prices merchants will charge, once the one-cent coin’s use as legal tender ends.

“We have no say over prices. Merchants price their product as they wish, and are only regulated by consumer affairs,” he explained. “We do not speak about prices at all. What we speak about is what you are paying at the cash register. Merchants are not asked or encouraged to round their prices.

“What is rounded is the final bill that consumers pay. So it is not the price of the product but what comes up at the cash register as your total. It’s one cash register cost to you.”