The Tribune

By NATARIO MCKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Retail Grocers Association head suggested yesterday that the price control abolition issue was “all politics”, claiming that successive governments had passed on abolishing price control for fear it would be used as a political football against them.

Philip Beneby, head of the Retail Grocers Association, said that grocery retailers would be able to govern themselves if price controls were abolished.

“In my view that’s all politics. Market forces are what determine prices and food is no exception,” he said.

“There are a lot of food stores around and customers have choices. No customer is tied to or confined to any one store. The market will determine the prices. If I’m selling rice and the store across the street is selling rice and the store up the street is selling rice, all of us are competing in the market so we would try to keep our prices down to have more customers shop at our stores. For some reason they don’t think that the stores would be able to govern themselves with regards to prices but we beg to differ,” said Mr Beneby.

The food retail industry’s main concern is that with price-controlled items accounting for up to 70-80 per cent of a store’s inventory, it is effectively selling the bulk of its products at a limited profit.

An 18.67 per cent gross margin was established in 1971 and has remained fixed ever since.

“What they don’t realise is that if price control is abolished, some of the other food items where price control is a bit high, some of those prices would come down. If I am forced to lose on price control items then I have to make it up someplace else. Price control items in the bread basket area would be rice, flour, sugar, canned fish, corned beef, powdered detergent, baby food, mayonnaise and things of that nature,” said Mr Beneby.

Food retailers have warned that price control margins must “at least double” to help the industry thrive again, saying an almost-10 percentage point increase from current levels is the bare minimum that it takes to secure their survival.

Yesterday, Labour Minister Shane Gibson asked the Bahamian food retail industry to “make the case” for an increase in its price control margins.

“He has asked us to produce some numbers,” said Mr Beneby. “The numbers he wants are in regard to the obvious increases that have taken place over the years. Price control has been in effect for some 41 plus years. The Bahamas right now is the only country in the region that has price control.”