The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s principal is urging the Government to provide “instant” price control approvals to minimise cost of living increases, inventory loss and general supply chain disruption.

Describing it as “a 50-year antiquated system that needs to be abolished”, Rupert Roberts told Tribune Business that the long wait to receive the go-ahead for price changes needs to “be fixed fast” given how rapidly costs and product availability are changing amid the global supply chain crisis.

Revealing that permission for changes to price-controlled items is presently taking three weeks “at a minimum”, with inventory going past its sell-by date as Super Value waits for the necessary approvals, he also voiced “disappointment” that the Prime Minister appeared to be relying on this mechanism to keep food prices in check while he makes breadbasket items VAT-able again.

“The problem with price control is that they have to develop something instant,” Mr Roberts told this newspaper. “The quotes we got this morning are no good this afternoon, and the merchandise is no longer available.

“It’s an antiquated system, and I pointed that out to Minister [Michael] Halkitis this morning, offering to work with him to do something about it....... It’s a 50-year antiquated system and should be abolished. It’s contributing to the cost of living, and we could buy a lot more food.”

Price controls were initially imposed by the Government to prevent what it viewed as a unscrupulous merchant class from exploiting lower income Bahamians by unreasonably hiking the price of food staples and other products, thus placing them out of reach while undermining living standards.

However, opponents argue they are an out-dated and distortionary mechanism that create more unintended consequences than problems they solve. They can result in product shortages, while retailers and wholesalers have to increase prices and margins on non-price controlled items to compensate for selling these goods as effective “loss leaders”.

Mr Roberts recalled discussions with the late A. D. Hanna, when he had ministerial responsibility for price control, asking him why retailers always received an 18 percent margin but that it took six months to approve, forcing merchants “to go out at cost and below cost, and stop importing it”.

Suggesting that little has changed since then and the present, the Super Value principal added: “We’ve had it go out of date because we’ve had to keep it so long in the warehouse before they approve it. All that contributes to the cost of living.

“I was disappointed in the Prime Minister’s remarks as threatening the merchants with price controls is not going to ease the food supply chain or ward off inflation. It’s much better to work together.”

Mr Davis, in his speech to Parliament last Wednesday, had indicated that the Government was looking to price controls to keep food prices in check as the Government moves to eliminate multiple VAT concessions on such products.

However, Mr Roberts voiced optimism that Mr Halkitis, minister of economic affairs, would be able to work with the industry to address the matter and “get it fixed”. He added: “We’re hoping for the best with this new administration, and are supporting them on the basis that they’re going to be fair and everybody will work together to try and save this nation because it’s going down the wrong road.

“There’s no point calling a meeting. They have to fix it, and fix it fast, because while we’re meeting suppliers are running out and price are increasing.” Mr Roberts said Super Value was aiming to have six months’ food supply in its warehouse, and would know early in 2022 whether the global food supply chain will “repair itself or be weak all year”, coupled with likely inflation levels.

Debra Symonette, Super Value’s president and chief financial officer, added that the 13-store chain anticipates no product shortages or “significant increase in food prices in the immediate future” despite global supply chain disruption although some rises will become evident during the first part of 2022.

“A shipment that would have taken several weeks before the crisis can now take up to three to four months, and containers that cost $600 now cost $2,400 freight,” she said. “There is also the issue of shortages of certain products - oils, soy, paper and plastic for making bottles stemming from issues with production.”

These issues, Ms Symonette added, include a shortage of factory workers; factories closing down due to COVID-19; and a lack of certain ingredients due to weather conditions such as flooding, snow storms.

“These problems will inevitably lead to price increases. The good news is that we are able to hold off some price increases until the New Year due to the fact that we were able to purchase these items early before the price hikes,” she said. 

“We are fully stocked with national brands and are still trying to maintain and improve on having a six-month warehouse inventory on hard goods. In addition, we are adding private labels to our inventory in case some national brands become unobtainable.”