BASSETERRE, St. Kitts – SENIOR MINISTER with responsibility for the Ministry of Trade, Hon. Dr. Timothy Harris has outlined the benefits reaped by the Federation over the past 40-plus years through the establishment of the Government’s Supply Office.
Dr. Harris was at the time of this pronouncement speaking at the official launch of Bonle evaporated milk, which replaced Carnation evaporated milk as the government-subsidised dairy product.
The Minister, who holds responsibility for the Government’s Supply Office, explained that the office was established in 1961 and through Section 17 of the Distribution and Price of Goods Act No. 7 of 1968, the Supply Office or the Supply Officer was given the power to procure supplies as authorised by the Minister who would act at the behest of Cabinet.
Harris noted that the Act, however, prescribes that this action is to be taken if Cabinet deems it “necessary for the purpose of ensuring the equitable distribution of foodstuff or essential commodities in the state…”
First on the Minister’s list of benefits is the ability to negotiate for better prices, owing to the volume of goods being purchased. Dr Harris explained that the Supply Office’s bargaining power is significantly greater than any individual importer, which redounds to the benefit of consumers.
“The strength of government diplomacy is sometimes at work, and so if we are having stickiness in terms of the supply of sugar, it becomes easy for a minister of Agriculture to take the phone up and to call his counterpart in Guyana and to say, ‘We are having a problem here in relation to the sugar. This is a matter that is important to the government. It is not a single entity…you are dealing with. We have now elevated this matter into the context of governmental relationships’.”
Harris expressed that through the establishment of the Supply Office, “better terms of payment and delivery options through the aggregation of purchasing and negotiating power” has also been achieved.
“It is well known, the greater the volume, then the greater say you have, and therefore you are able to benefit from volume discounts and that is true not only for the government but even for private entities. If your stock is small, then you can’t argue about price because if they don’t send you one container, then that is not a big loss for them. That can easily be added as part of the marketing regime for some entity that is large. And so you have to be able to bring significant quantities.”
Harris noted that the Supply Office is not into the business of “profiteering”, and as such the mark-up which would be applied to products it distributes would be significantly lower than that at other wholesale and retail establishments.
In addition, customers, through the establishment and operation of the Supply Office, have benefitted from the “sustained price stability of goods”. According to Harris, the Supply Office continues to “absorb moderate price hikes from its suppliers on a longer period than individual businesses can or may find it desirable to do”, thus preventing additional strain on consumers’ pockets.
“So it is not every time there is a movement in the price of the commodity that we import the supply office responds in terms of taking up the price…because we are concerned about the stability,” Harris explained.
While private entities import goods “when it is convenient from the point of view of the profit motive”, the Supply Office, as Harris explained, is more concerned with and has made provisions for the reliable availability of products at the domestic markets.
“We are concerned about broader social-economic issues, and so even at times, it may mean selling these things at cost or even below cost to maintain their access and affordability. The government does that! And to that extent, then you have a more reliable supply.”
