Consumer advocate Maureen Holder has welcomed the news that a new social compact has been successfully negotiated to reduce the prices of some items on supermarket shelves, but says it does not go far enough.
The Executive Director of the Barbados Consumer Empowerment Network (BCEN) has also questioned the level of ease consumers will actually get, given that their purchasing power is already reduced.
“BCEN does not view the renegotiated compact as a cost-saving measure but an indirect price control measure because prices can fluctuate at any time but not beyond the cap on the mark-ups,” Holder said.
“However, wages and salaries do not move in the short-term nor according to the fluctuation in prices and this is a concern because it impacts the finances and purchasing power of consumers.”
Minister of Foreign Affairs and Foreign Trade Kerrie Symmonds announced at a press conference on Thursday that under a new compact to be approved by Cabinet in about a week’s time, distributors and manufacturers have agreed to mark-ups on the 47 items in the basket of goods, ranging between 15 per cent and 18 per cent on dry goods and between 12 and 20 per cent on cold storage products.
About 80 per cent of the island’s major supermarkets are on board with the new compact. Poultry producers are not, however, but are expected to work with the supermarkets to offer the best prices possible.
Holder told Barbados TODAY that while BCEN “does not have a problem with what we have heard so far”, it was not sufficient.
“We are not against the retailers getting some sort of incentive or getting something from it because they have to survive, but we want to see how this compact will serve the specific purpose of allowing Babadians from every socio-economic background – from the poor to the rich – to afford goods and services in Barbados.
“The compact is not designed for that because they are only focusing on 47 major goods. Again, if poor people making $150 per week are still unable to purchase enough from that basket of goods, the compact isn’t made for them,” she argued.
Holder also maintained her position that the prices associated with the range in mark-ups on the 47 items will depend on what rate increase, if any, the Fair Trading Commission (FTC) allows the Barbados Light & Power Company (BL&P).
The island’s sole electricity provider is seeking an 11.9 per cent rate hike in basic rates and the FTC is expected to issue a decision in a matter of weeks.
Acknowledging that retailers do have high energy costs, Holder said: “If the new compact took into consideration the cost of energy that is fine, but what we have to wait on now is how the Light & Power rate result will impact on the actual range of the mark-ups.”
“If the Light & Power gets that increase then the prices associated with the mark-ups will reflect the increase. If the Light & Power does not get the rate increase then the cap on the mark-ups and associated prices will remain within the particular range outlined,” she added.
Earlier this week, Holder urged authorities to ensure that prices do not increase significantly on items not included in the basket of items, as she suggested was the case during the previous compact which was implemented from July 21, 2022, to January 31, 2023.
Asked to respond to this concern on Thursday, Chairman of the Retail and Distribution Group of the Barbados Chamber of Commerce and Industry (BCCI), Tomlinson Bynoe suggested that it was up to consumers to choose where to shop.
“We are a free market and we could not speak to what would be the business model or approach at this stage of any one individual or business,” he said.
“What I can say to you, though, is that our membership continues to understand where we are as a country and continue to do our best to manage this exercise in the interest of staying in business but, more importantly, making sure that the constituents that we serve – our stakeholders, our customers – are still able to live a decent quality of life, and we are doing our part to ensure that occurs,” added Tomlinson who is Director of A1 Supermarket Limited.
