By Suelika N. Buchanan
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Mr.Scott Caines, Managing Director of Frank B. Armstrong (St. Kitts) Ltd and C&C Super Foods Ltd
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(Basseterre; St. Kitts): The Government has approved a list of ‘basket of goods’ for price control which was discussed during the post-cabinet meeting recently.
The control foods are said to ensure that the country’s poorer citizens are able to lead a life of improved quality through the ability to access basic food and non-food items at a reasonable cost.
While some Supermarket owners are pleased that the Government has chosen to place a price control and reduce some of the food items and non food items they believe that the present high duty cost should not have been there in the first place.
Scott Caines, Managing Director of Frank B. Armstrong (St. Kitts) Ltd and C&C Super Foods Ltd said that once the high cost of duty and tax goes down they will certainly carry down their prices.
The food items the Government has listed are fruits and vegetables, chicken parts, frozen fish, corn meal, flour, milk, margarine, pasta products, cheese, sardines, crackers, cereals, toothpaste, cooking oil, peas and beans, rice, corned beef, toilet paper, disposable diapers, and medicines for allergy, hypertension, asthma, diabetes and eye conditions.
The price of refrigerators, stoves and mattresses up to certain limited sizes will also be regulated.
According to the Post-Cabinet Report by Minister Nigel Carty, “over the next two weeks, further work will be done by the Ministry of Consumer Affairs and the Ministry of Finance to determine the precise margins at which these goods can be sold.
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A section of C&C Super Foods
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The Ministry of Finance will also advise on which of these goods, if any, should be exempt from import duty. It is envisaged that this new price control regime will take effect in September of this year.”
Caines added, “People need to understand that the grocery business is a very competitive business, there is even a 78.5 per cent duty on pasta for example, and that shouldn’t be, so with that we have no other choice than to have our prices where they are.”
He also feels that there is no need for the government to control the prices once the duties go down the food prices would go down as well, because they would want to offer the best services to customers as well as other Supermarkets would want to.
Another major supermarket manager said that he is not too familiar with the recent price control plans, but thinks that it’s just another Election strategy for the Government.
~~Adz:Left~~ “It seems that whenever there’s elections coming up the government would impose these reduce control prices, however, there is no need for the high importation and duty costs that we incur,” he said. “And also we’re not properly informed as to why there are those high duties anyway.”
He continued: “We would love to reduce our prices and I’m sure I speak for all shops but the margins that we have to face forbids us to do so because of the high cost on duty but we still operate our items at a reasonable price that are at very less margins compared to places like St. Maarten which are much higher.”
He noted that items such as orange juices were at a duty of 85 per cent.
“We can’t reduce prices unless government takes off these horrendous duties,” he said.
In reference to a report by the Sun St. Kitts Newspaper, the reporter stated that according to a book titled ‘Economics in One Lesson’ one of the chapters titled “Government price-fixing”, the author is quoted as saying that “Government cannot hold the price of any commodity below its market level without in time bringing about two consequences”.
The two examples were to increase the demand of the product and to reduce the supply.
“Profit margins are reduced or wiped out. The marginal producers are driven out of business. Even the most efficient producers may be called upon to turn out their product at a loss…” the report stated.
The report also went on to say that according to another economist, “Price controls are the political solution enacted to stop price inflation, but the controls do not work… The price controls do not make the goods cheaper and, in fact, cause a shortage of those goods as the demand quantity will be greater than the supply quantity.”
When questioned about those statements and whether he believes that would happen after the Government implements the decision in September, Caines said that those are just “possibilities”.
“One cannot say for a fact that that will happen,” he said. “I am sure there will be negotiations and that the government wouldn’t let that happen.”
Caines said that he would like to see duty removed from certain items such as certain chicken-parts and with the various tax and duties which include Customs duties, Consumption Tax, Custom Service Charge and various Port charges the remainder, only one charge should remain which is the Custom Service Charge.
“They should also try and reduce prices on school books and uniforms and that’s just another way of making the cost of living easier,” he said.
