This is the first in a three-part series on price controls in Bermuda

Just days before the near finalisation of this opinion piece, two very important events have taken place around this topic.

They are:

1, The publication of a draft of the Competitions Act 2026, a law, in essence, called for in the 1970s by this author and other students of economics upon our return to Bermuda.

In this regard, I thoroughly and unreservedly endorse, and commend, minister Alexa Lightbourne for putting the public interest, the consumers at large, ahead of the narrower interests of, unfortunately, some avaricious merchants.

2, The targeted intention to directly introduce competition into, particularly, the grocery store market at Marginal Wharf, St David’s. Both recent developments are well within the scope and intent of this opinion piece, events I will leave largely in place in the manner they were before such events transpired.

Right off the bat, price controls do work and I will debate anyone, anywhere, at any time that that indeed is the case. It’s primarily a matter of from whose perspective these controls work, or more importantly, benefit. The vendors or the consumers? It is not a question of whether price controls work. All concerned know that they do work. So, bring it on.

Price controls are not new; the evolving government controllers are what’s new. We must understand a few things before we mindlessly parrot nonsense phrases being bandied about that “price controls don’t work”. I probably shouldn’t be surprised that we have current and former PLP politicians spouting and believing this drivel.

The price setters and controllers then, were the usual two suspects, the “all-powerful” private sector of importers, wholesalers, retailers, the merchants at large, the bankers, the only electricity supply utility company, Belco, the large landowners and law firms, etc, which all formed or influenced in one aspect or the other the government administrations of those early days. In fact, they collectively constituted the government of the day, and leisurely governed from the comfort of their banks, law firms, yachts and golf clubs.

Today, the “script has been flipped”. The sons and daughters of the workers and consumers who were, and are today, being fleeced and exploited generally have via government legislation moved to reverse this historical imbalance and monopoly.

“How dare they”, the merchants fume. That notwithstanding, Bermuda remains, as it always has been, a relatively captive and geographically isolated backwater market for, by and large, those very same merchants who enjoyed the privilege of having an historical monopoly as the only “price setters and controllers” here on the island. By extension, these merchants have, without interference or intervention, enjoyed the exclusive monopoly to make unregulated super or mega profits. Profits or “markups” popularly thought to be anywhere between 300 to 500 per cent on some products.

For the moment, I am professionally constrained, and conflicted, from revealing more on this issue. However, I do categorically and unequivocally this day challenge these bankers, insurers, merchants, Belco, importers, wholesalers, retailers, etc, to reveal the true level of their “profit margins and/or markups, etc” for governmental, and ultimately, public scrutiny in any attempt they may wish to support, explain away, refute or exonerate themselves from such popular and damaging allegations.

In this vein, and although she may not have appreciated the “unintended consequence” of her remarks at the time, the senator Victoria Cunningham, of the One Bermuda Alliance, backhandedly provided the answer to an “ultimate test” as she frames it, in an op-ed in The Royal Gazette dated August 11.

She expressed these remarks in the context of the Government essentially not having sufficient and accurate enough “evidence” to gauge the precise level of the reduction of the “costs or prices” consumers pay at the checkout counter. Ms Cunningham had the following to say on that issue, that: “The most important of those questions is also the simplest: what evidence has the Government produced showing that this mechanism will actually reduce what consumers pay at the checkout”?

It seems to me that the very straightforward and obvious answer to that query, and the passing of Ms Cunningham’s ultimate but very circular test, is that if the merchants voluntarily provided truthful data, or evidence, to the Government’s inquiries or questions concerning the total landed cost and any and all subsequent mark-ups applied thereon in respect of the goods earmarked for price controls, then the Government would at a glance precisely know, and be in a pole position to set the “baseline” prices for those goods.

Simultaneously, what consumers would be paying for these now “regulated” goods at the checkout would also be pellucid to all concerned upon the printout receipts at the point of sale. Those baseline prices would trend-set as an historical record, and a blueprint for any future adjustments up or down, that the Government may need to make to these established baseline prices.

This very basic methodology is not rocket science, unless, of course, it is the express intention of Ms Cunningham, affected merchants and other detractors to mislead.

Ms Cunningham should be patently aware of the intention of this initiative. If she doesn’t believe it sufficiently achieves its objectives or goals, then she should suggest how it can, particularly since she says, in principle, she supports it. If so, then why the political gamesmanship? Vulnerable people’s quality of life is at stake here.

The real problem here is the wilful uncooperative behaviour of the merchants, which must be corrected by the application of suitably appropriate and punitive legislation, along the lines of the competition law, if that is what it takes to get the job done.

If Bermuda had in place a Bermuda Monetary Authority with real teeth, a government and BMA-regulated monetary policy with controls over the interest rates of financial institutions, a suitable raft of robust antitrust legislation, a properly functioning and deployed progressive and proportionate corporate income tax, instead of an oppressive, colonial, regressive and hugely personal and disproportionate taxation system, then for starters, these merchants, banks, insurance, utility companies, etc, could be brought to heel.

In that condition, they would be lawfully obligated to make such transparent disclosures or suffer the very much intended legislative consequences. Featured among which there should be stiff bottom-line-severing civil liabilities and crippling criminal penalties on pain of incarceration of directors, CEOs, etc.

Such measures should serve as suitable deterrents for any breaches of this legislation. I strongly recommend that this should be the case. The minister must be commended for sticking to her guns in prosecuting this long overdue, but very necessary, policy and initiative. It’s the best start for reducing the cost of living generally that I have witnessed in my entire involvement in frontline politics since 1967, the year I joined the PLP as a young man.

Minister, you have the correct entities and culprits in the crosshairs of your legislative weapons. Now lock and load, and pull the trigger if you have to. Let the chips fall where they may.

• Phil Perinchief is a lawyer and economist