by Eulana Weekes
St. Kitts and Nevis (WINN): The Government of St. Kitts and Nevis is seeking to address the issue of rising food prices, and information derived from a stakeholders’ consultation on Wednesday, July 12, suggests that external factors drive the rising cost of food.
Notwithstanding that external factors have played a part in food price increases, social commentator Mr Dwyer Astaphan questioned and discussed how suppliers may be affecting the spending power of consumers.
“Is it possible that suppliers may also be contributing to these high prices, based on the margins that they have been maintaining as a percentage of the cost of the goods in their door?”
He added, “Let’s start with price control. Certain food prices are controlled under the law, but it is widely believed that food suppliers may have been ignoring this in large measure over the last 20 years. Yet, nobody has been prosecuted. The tin of sardines thief goes to jail or pays a big fine, while the sellers of expired goods and those who break price control law just keep rolling on untouched. Maybe untouchable. Maybe the long arm of the law is not long enough to reach them.”
Astaphan referenced that a supplier may have initially placed a 30% profit on an item costing $1.00, which was then sold for $1.30. Still, considering the challenges associated with the pandemic and supply chain issues, the cost of the item may have been increased to $2.00. He questioned whether the suppliers charge 30% of the $2.00, which is 60 cents, or if they continue charging just 30 cents.
The social commentator suggested that suppliers should, in good conscience, give more breathing room to consumers and more spending power by controlling their prices, especially if their operational costs have not changed significantly.
“When a consumer has more spending power, he/she usually spends quite a bit of what he/ she has. So basically, if the internal operating cost to the suppliers have remained stable; and they have, because electricity has not gone up, gas is up and down, wages have not gone up, so except for those carry-on costs from the goods, the cost of the duty to the freight and so forth, the internal operational costs have not gone up significantly, if at all. So, if that is the case, can we accurately say that external factors are the cause of the hike or [is it] a cause of the hike, along with local factors?”
He added, “Let us presume, if only for discussion purposes, that I am correct – if the suppliers had stuck to the old profit of 30 cents on the good, rather than 30% on it, because 30% of a $1.00 is 30 cents, but 30% of $2.00 is 60 cents. So, instead of charging 60 cents as profit, stick with the 30 cents. Hold down the prices. Help to stimulate people. Give them comfort and confidence and improve your own goodwill as a business.”
“Injustice to consumers is injustice to you,” said Astaphan in a statement geared towards suppliers.
Citizens and residents continue to cry out about the cost of living. Many have stated clearly that they are spending more but gaining less at supermarkets. It is believed that costs are passed down the chain from producers, to suppliers and on to the consumers, due to the increased cost of production and freight.
Prime Minister Dr Terrance Drew engaged several business owners at a consultation on Wednesday, July 12, 2023, calling for a collaborative approach to reduce food prices in the Federation.
Drew stated, “We all have to work together to manage what is affecting the cost because that cost is affecting all of us. Everyone here is affected by it; our families are affected by it, our communities are affected by it. So, in essence, what I have asked Consumer Affairs to do is work along with you to see what we need to do in order to control these prices.”
The Government, in a quest to address the cost of living issues, has reduced corporate income tax from 33% to 25% and incorporated business tax from 4% to 2% until December 31 and has also eased financial pressures at the ports by capping freight charges on 20 and 40-foot dry food and cold storage containers at pre-Covid rates.