The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading food retailer has warned Bahamian consumers to brace for further price increases resulting from global supply shortages, with pork and beef costs potentially rising 10-12 per cent.

Rupert Roberts, Super Value’s owner, told Tribune Business that prices for pork and related products could “go out of sight” as a result of a drought and virus, respecively, that has thinned out US cattle and pig herds over the past two years, sharply cutting product supply.

“This is what the public is going to have to face in the near future,” Mr Roberts told Tribune Business. “Pork chops, ribs, bacon, ham and everything else is going to go out of sight.

“As they [suppliers] feed the price increases to us, we have to pass them on to the public. We have been absorbing, but we can’t do it all.”

The USA Today newspaper quoted estimates from Sterling Marketing, which said the US cattle drought had increased wholesale beef prices in the US by 23 per cent. And a virus outbreak among hogs had increased pork prices some 56 per cent.

While US retailers, like their Bahamian counterparts, have absorbed much of the increase to-date, beef and pork prices rising 7.5 per cent and 3 per cent, respectively, over the past year, Sterling Marketing is projecting 10 per cent increases in 2014.

Mr Roberts said rising supplier prices would also increase import duty payments, and he estimated that Bahamian consumers would see similar 10-12 per cent price increases for the likes of beef and pork.

Pointing out that it usually took three years to rebuild a cattle herd’s population, the Super Value president added: “Pork is going to be considerably higher.

“We just don’t want the public to accuse us of pre-starting Value-Added Tax again because prices at the border are going to go up again. Hamburgers, the poor man’s food, are the highest I’ve ever seen it.”

Mr Roberts’s comments, and the mounting concern internationally over rising food prices, are again likely to be seized upon by the Government to support its case for founding the Bahamas Agriculuture and Marine Sciences Institute (BAMSI) in Andros.

Apart from boosting entrepreneurship and diversifying career opportunities for Bahamians, a stated objective of the school is to help cut the Bahamas’ estimated $1 billion food import bill and boost this nation’s food security.

The likelihood of supply chain price increases is yet another issue on a rather full menu facing Bahamian food retailers and wholesalers. Apart from the sector’s proposed tax treatment under VAT and its links to Price Control, it is also grappling with what it perceives as its unfair treatment under the Business Licence tax.

As reported previously by Tribune Business, the food retail and wholesale industry is especially peeved that it is being required to pay Business Licences one-time, impacting cash flow, while other sectors have been allowed to pay instalments quarterly.

The Retail Grocers Association, in a March 31, 2014, e-mail to Roger Forbes at the Business Licence Unit, said: “During our meeting last month (youself and representatives of The Retailers Association) we were emphatically advised that we were not able to pay our Business Licence fees in instalments.

“Hence, we abided by this advice and paid our Business Licence fees in full. However, it has come to light that other merchants have been afforded this privilege (they have paid one quarter of their fee as the first installment).”

The Association added: This unfair treatment can be likened to our real property tax dilemma, in which we were made to pay in full (on time), yet those businesses that did not pay at all when they should have, have now been granted the opportunity to pay their back taxes and receive a discount.

“Should not the companies that made an effort to pay on time be entitled to such a discount? It seems as if we are being penalised for paying early/on time.”

Mr Roberts, meanwhile, told Tribune Business he is also querying whether Business Licences can be paid for individual stores, rather than “collectively” for the whole company.

He added that the ‘collective’ approach disadvantaged businesses such as Super Value’s, because rival standalone inner-city stores with the same square footage would pay a much lower Business Licence fee.

As a result, Mr Roberts said he is questioning whether Super Value has been over-charged on its $3.1 million Business Licence fee.