Local businesses urged to temper percentage profits as higher prices loom

Government is being urged to seriously consider the reduction of import taxes and a review of its basket of zero-rated goods, as businesses prepare to transfer considerable cost increases to consumers.

President of the Barbados Chamber of Commerce and Industry (BCCI), Trisha Tannis made the suggestions, even as she cautioned local businesses not to pursue unreasonably high profit margins at this time.

But she also contended that since February, businesses have been shielding the public from the inevitable increases and would no longer be able to hold strain.

“The only other variable that the government contributes to in a large way obviously is the level of duties and levies on certain items, and that is one thing that they may want to re-look. Essentially, they might want to have a basket of goods again where they may want to draw a circle around,” Tannis explained.

“I will tell you that there are a lot of international price shocks that are reaching into that basket. So we are talking about very basic consumables like flour, canned fish and several similar consumables that are in that basket already.

“And, short of essentially looking at the level of excises and duties on these things, it is really very difficult, even if the retailers freeze on their end, which is what we would ask them to do, but obviously you would have other push and pull factors.

In an interview with Barbados TODAY, Tannis echoed concerns about the doubling of freight rates and some goods increasing by as much as 25 per cent due to commodity shortages on the global market.

Simultaneously, she explained that measures like the recent minimum wage orders, and swiftly increasing overheads have not helped.

“The chamber is not surprised, and we came to the public and essentially announced that this is something we were bracing for. We were trying to hold prices, and I think we did,  which was a concern going into the lockdown and we had most distributors committing to and signing their names to the fact that they were going to hold prices during the lockdown as much as they could,” the BCCI president contended.

“I believe that generally speaking, that has helped, but as we are coming into summer, it is very, very difficult to protect against the price shocks that we are seeing coming through the pipeline internationally. Obviously, people are looking for alternative sources of supply, but when we have global issues, there is a ripple effect internationally, so the number of players you can go to secure better pricing starts to dry up as well.

“There also needs to be clearly an agreement that now is not the time to be seeking out unduly high margins in terms of the excess, but your margins are also supposed to cover your overheads as well and if your overheads are climbing, then your margins also have to go up to cover your overheads,” the BCCI president noted.

Tannis added that discussion on self sufficiency within the Caribbean Community (CARICOM) is becoming increasingly important as she lauded discussions involving Barbados, Guyana and Suriname about food security within the region.

“But these things take time and political will as well. We are very happy the government has actually started these conversations, that we could pick up and carry on and we do need to accelerate the urgency with which these things are done. But the CARICOM is also a small space globally, so I think we do need to look to be affiliate members of larger trading blocs,” Tannis concluded.
(kareemsmith@barbadostoday.bb)