The Tribune

• Super Value chief: ‘Levelling off’ as early as month’s end

• But main supplier warns of $2 per carton egg price hike

• Timing ‘bad news’ as coincides with ‘baking season’ start

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s president yesterday voiced optimism that food price inflation could start to “plateau” by end-September despite warning Bahamians that egg prices could suffer an imminent 60 percent increase.

Rupert Roberts told Tribune Business the 13-store supermarket’s US egg supplier had informed it that cartons containing a dozen eggs will increase by $1.50 due to the loss of 35m chicks as a result of bird flu - a number equivalent to 20 percent of its regular production.

Conceding that the timing is “bad news” for consumers as it coincides with the start of “baking season”, he added that the addition of freight costs and Bahamian import duty will likely take the per carton increase to $2 - pushing the total price to $5 or just over - right at the time when Super Value had been hoping to lower the cost.

Nevertheless, Mr Roberts told this newspaper that eggs are among the exceptions rather than part of an overall trend when it comes to food prices and related inflation. Besides cooking oil, and upcoming potential increases of 20 percent and 10 percent for rice and sugar, respectively, Super Value’s buyers have not been informed of any further cost rises by suppliers.

As a result, Mr Roberts said he was hopeful that “this inflation spiral is levelling off” for world and Bahamian food prices earlier than he had originally anticipated. Having previously predicted this would occur towards the end of the 2023 first quarter, he added there were signs this might happen from month’s end, though there is no indication that costs will go down as rapidly as they have escalated post-COVID.

Eggs, though, will remain an outlier with US-based Hillandale Farms warning that high prices could persist for a year until its egg-laying flock is rebuilt. “We have been informed by our egg supplier that eggs are going up by $1.50 a carton. With freight and duty, that will go to $2 per carton, which is what we estimate it will go up by,” Mr Roberts told Tribune Business.

“We’ve put eggs on special at the moment at $3.29 a carton. We had hoped eggs would go down next week to $3.09, and $2.99 the following week. When they dropped the duty [in the May Budget], bird flu hit and doubled the price of eggs. The Government thought we didn’t respond to the duty cut, but we did.”

Mr Roberts said that while Hillandale Farms had escaped the first bird flu wave, it had not been so fortunate second time around, which has cost it 35m chicks equivalent to one-fifth of its production. “They took the thousands of cases in the cooler, tracked the shipping down, and all eggs were confiscated and destroyed,” he added. “There’s been nothing proven wrong with the eggs but they’re not taking any chances. That’s going to put eggs back in the $5 per dozen range.”

Asked how quickly this increase will occur, the Super Value chief indicated within weeks. “It will be the next time we import,” he added. “We have them on special now at $3.29, and have about 1,200 cases left. We have to hold the special until Wednesday night (tomorrow) when the advertising expires.

“If we have any left, we will continue the $3.29 through the week as long as supply lasts. But the next shipment we expect them to go up to the $5 range. This is bad news for the consumer as we’re entering baking season. Sales do go down when the price goes up, supply and demand. The [Hillandale] owner told me $1.50 per carton. They will forward us the new price today, and we will see if it’s $5 and we have to go to $4.99.”

Eggs, as a food staple, are among the price-controlled “breadbasket” items where margins are set by the Government’s Price Control watchdog. Retailers are allowed a fixed mark-up of 10 percent, and Mr Roberts voiced concern that the rise in egg prices could affect sales of complementary foods such as bacon. Besides The Bahamas, Hillandale is a major egg supplier for the entire US east coast, including Florida, the cruise ship industry and Puerto Rico.

Mr Roberts said the impending price increase placed eggs together with gasoline, cooking oil and rice - with Super Value informed of an imminent 20 percent increase in the latter’s price - as the “four leading inflationary items”. However, striking a more upbeat note, he told this newspaper: “After those, the buyers told me they have not been notified of any other increases. Apart from rice, they expect a little increase in sugar but it is not an expensive item.

“I hope this inflation spiral is levelling out. I thought that might happen next year, but it looks like it will happen at the end of this quarter and that will be great for here. I hope the spiral in inflation is plateauing out. My past prediction was that this will not level out until the first quarter next year, January, February and March, but it looks better now. We hope this is it, and that the supply keeps up. We are assuming it’s holding through, and the supply is not broken.

“Eggs will take a year to get back to normal. They have to replace the flock and get them laying,” Mr Roberts continued. “The only other problem we’ve had is with Hunt’s tomato paste. They refused our last order because they’re keeping the supply in the US. They don’t have enough to supply the US, so they’re not going to export.

“We shifted to the Philippines, and we have 300-400 cases from the Philippines. It’s good quality. The brand name will change, but we still have the items. The US will show empty shelves, but we’re all over the world. When the supply of toilet tissue dries up, we’ll go to Turkey or Trinidad. The customers want the name brands they are used to, but we have to encourage them to buy what we get, especially on cooking oil.”

With Christmas still some months away, Mr Roberts said Super Value has contained price increases for picnic hams and regular hams to 10 percent and 20 percent, respectively, compared to last year’s costs by locking in prices over the summer.

“Really, it’s a miracle,” he told Tribune Business of these prices. “This over last year. It’s not too bad. We had to lock those in during the summer, and they asked us to go ahead and pay for them back then so they could hold them. I think the Government should be happier it’s not going any higher and the consumer should be happy with the exception of eggs.

“We have six months’ inventory on most hard goods, and corn beef that has a four-year life, we probably have a year’s supply. We’ve protected the country on most hard good items. We have them inventory so their prices cannot go up.”

The Bahamas, as a country that imports virtually all it consumes and produces very little food of its own, has little to no control over food costs and is extremely vulnerable to the present inflationary environment. This has been a major factor driving the cost of living crisis, although the Government - in the grip of its own fiscal woes - tried to bring help where it could with selected tariff cuts.