The Tribune

By EARYEL BOWLEG

Tribune Staff Reporter

ebowleg@tribunemedia.net

THE president of the Retail Grocers Association said recent commentary from the Inter-American Development Bank (IDB) on the negative impact of expanded price controls on businesses is “spot on”.

Philip Beneby said the criticism may “sound better” coming from the international body, suggesting the association’s comments on the issue fell on deaf ears.

“The only thing I would say to that at this time is that IDB is absolutely correct. That’s what we’ve been saying and trying to get across right from the beginning, but be that as it may, maybe it may sound better coming from the IDB. So that’s all I’ll say to that. The IDB is spot on, they are right, correct.” Mr Beneby told The Tribune yesterday.

The Inter-American Development Bank (IDB), in its latest quarterly Caribbean economic bulletin, indicated that social assistance to offset the cost-of-living crisis could be better focused on poor families through the use of conditional cash transfer (CCT) initiatives that build on existing initiatives such as food stamps.

“A price control, at least in terms of behaviour if adequately enforced, is a de facto combined turnover tax and income redistribution policy (a cash transfer from business to consumers),” the IDB wrote. “Revenues for specific products that would have accrued to specific businesses, and possibly to the government in the form of an increased VAT, would now be transferred to all Bahamians.

“Additionally, despite the updates, the price controls do not differentiate using size or profitability. Therefore, this policy is likely to impact small and medium-sized enterprises negatively and disproportionately because they are more likely to have neither the volume of sales nor the economies of scale to absorb the per unit loss of revenue. In addition, they will have to use these same diminished margins to cover increasing electricity bills and labour costs.”

Prime Minister Philip “Brave” Davis previously revealed that 38 new categories of items will be subject to price controls.

There have been reports that food stores throughout the country were “up in arms” over the details of the government’s expanded price control regime amid fears it will “devastate” the industry and jobs for hundreds of workers.

However, the government has not backed down in its implementation of the changes.

Asked for an update on talks with the government on price controls, Mr Beneby said: “I wouldn’t get into that. All I would say is that a statement is forthcoming from the Retail Grocers Association.”