Roban on price hikes
MPs hear price gouging allegations
Putting food on the table is a major worry for older residents, the head of an island charity said yesterday.
Claudette Fleming, the executive director of Age Concern, said members had raised concerns over price increases in a recent survey.
She said that increased cost can force older people “to go without”.
Ms Fleming explained: “It’s not necessarily going without food entirely, but going without more nutritional options, regressing to unhealthier choices which may be cheaper, and, ironically, is the opposite result of what policies like the sugar tax are espoused to achieve.”
She was speaking after Walter Roban, the Minister of Home Affairs, announced yesterday that the Consumer Affairs department was to look into claims that retailers had increased the prices of foods not covered by the sugar tax.
Mr Roban told the House of Assembly the Bermuda Government had received “a number of complaints” from the public over “price gouging”.
Ms Fleming said she was not surprised to hear that customers had reported higher prices and that retailers had said were a result of the new tax.
She added: “As a consumer, I myself have noticed a rise in prices in the last few weeks.”
Ms Fleming said that Bermuda would at some point have to ask if the “unintended consequences” of the sugar tax were worth it.
She explained: “The proof of the pudding will be the ability to demonstrate that the sugar tax has achieved any positive health changes, or whether it has simply increased the cost of food in general, while also increasing the tax base — which may be good for grocers and the Government, but not necessarily so good for the most vulnerable consumer’s health or pocketbook.”
But Zach Moniz, manager of the Lindo’s Group of Companies, said that the grocery chain had “absolutely not” raised prices on food items that fell outside the new tax.
Mr Moniz added that food prices were determined by variables, including supply and demand, seasonality and wholesaler prices.
He explained: “A change in any price has to do with any or all of the aforementioned scenarios.”
Mr Moniz said that Lindo’s put almost 1,000 items on sale every month.
He added: “This is obviously a price decrease. At some point, items on special return to normal retail price.
“This is not a price increase, this is just no longer a promotion.”
The first stage of the sugar tax increased duty rates on sodas, sweets and other items by 50 per cent.
The tax will increase to 75 per cent in April.
Mr Moniz confirmed that shoppers would pay higher prices on “items directly impacted by the sugar tax” as a result.
Fred Barritt, of soft drinks importer John Barritt and Son, said that the firm would put up prices in the spring.
He explained: “We have no choice. Either our prices go up or we will have to reduce other costs.
“This is a significant increase in cost that business will have to pass on to their customers in order to survive.”
Mr Barritt said that several factors, including global markets, transport and wages, contributed to prices.
He explained: “These costs are always going up so prices must go up to cover them.
“In a country with an already high cost of living the introduction of more taxes is obviously going to result in higher prices.”
Mr Barritt said that if operational costs increased, businesses had to react.
He added: “Either prices go up or there has to be a compensating reduction in other costs.
“As the largest component of cost in most local businesses is payroll, job losses are the only real alternative.”
Mr Roban told MPs that it appeared that “the price of certain items are always higher this time of year”.
He added: “This year, as has been true in recent years, some persons are having to forgo enjoying their traditional foods because they are finding it harder to make ends meet.”
Mr Roban said that because Bermuda imported the majority of its food “it is often difficult to assess fair pricing”.
He added: “In addition, many of our items are shipped in smaller quantities which drives up the price per unit.”
Mr Roban said that retailers must also “add a percentage to pay their staff, operating costs and to earn a profit”.
He said the annual increase in the price of food since 2013 ranged from 1.4 per cent to 3.1 per cent. Mr Roban added that people should shop around and could also speak to store managers about pricing concerns.