Moniz: price controls are beginning of the end for us
A grocery chain boss has warned that price controls could hamper the industry, increase shopping bills and reduce consumer choice.
Zach Moniz, the manager of Lindo’s, said recent accusations of companies marking up prices on products by as much as 500 per cent were “ridiculous,” as he and fellow retailers grappled with new legislation affecting the sector.
Mr Moniz was referring to comments in a three-part series of recent opinion pieces by Phil Perinchief, a former attorney-general who holds master’s degrees in economics and econometrics.
Mr Perinchief said in one article he knew of retailers adding a mark-up — cost added to items to determine the final selling price — of between 300 and 500 per cent on some products.
Mr Moniz also insisted that the industry was not consulted on the legislation, which includes the Cost of Living Amendment (No 1) Act and Cost of Living Amendment (No 2) Act, and related regulations requiring businesses to provide a monthly breakdown of how costs are set on essential items, while empowering the Minister of Home Affairs, Alexa Lightbourne, to intervene.
He told The Royal Gazette it involved inputting more than 20 data points on thousands of products that could lead to higher costs at the tills, as well as higher taxes as businesses and the Government carry out the work required.
Mr Moniz maintained that a less burdensome and less costly approach would be to implement an audit-based model whereby random containers can be assessed, rather than full shipments of between 40 to 60 containers per month for his establishment alone. There are close to 20 major grocery outlets in Bermuda.
The ministry said previously that customers were paying more for food than at any time in the past decade and should know whether relief granted reaches the shelf. In the most recent year, that relief amounted to $4.6 million in duty.
Addressing Mr Perinchief’s comments on mark-ups, Mr Moniz told The Royal Gazette: “I say to him, that is ridiculous. The real figure is substantially lower than 100 per cent.
“My mark-up needs to cover all the operating expenses I need to run this business. You are looking at costs for labour, electricity, rent, credit card and bank fees, taxes, maintenance costs, software, licences, supplies, health insurance … and the same inflationary pressure that the consumer sees in the shop, we see in our operating expenses.
“I am already underselling in my mark-ups. Where else do you want me to go with the mark-up? Eventually, I am not going to be able to pay my employees.
“If you are moving in the direction of price controls, that is the beginning of the end for us, as far as the economy goes — you are going to drive shortages, without a doubt.”
He said the main drivers of price changes were tax, which the Government had “pulled the trigger on” by granting relief, along with freight costs, which fluctuate based on oil prices, and first cost — set by the vendor, and which can fluctuate rapidly based on international and environmental factors.
“My concern is OK, you will get all this information, see it is the first cost and see there’s not much we can do,” Mr Moniz said.
“If I can’t clear my expenses, I don’t carry that item, then what? The variety that you are used to becomes contracted and the quality of life starts to diminish.”
Speaking to claims by Mr Perinchief that merchants “may make their ‘mega profits’” on baskets outside of the mandated quota, Mr Moniz added: “The industry standard is that anywhere from 1 to 3 per cent is considered doing well in the grocery industry. Everybody is in that bracket.
“They go up and down. There are indirect expenses — a $1 million generator you didn’t see coming, $30,000 on a new door … these are things that happen out of the blue all of the time.”
Phil Perinchief, a former attorney-general, who wrote a series of articles in support of price controls and competition laws, said last week in response to comments made by Zach Moniz, manager at Lindo’s: “Mr Moniz may make his claims.
“Should he transform those claims in legal documents then I will suitably engage and subpoena all of his records on pricing and its formulae etc or methodology respecting relevant items from his suppliers to the cash register, for the last three to five years.
“Then we will make a comparison, for the court, and the public no doubt, to ascertain whether or not there is any truth in what is being said popularly among some circles about his markups or profit margins.”
Mr Perinchief added that he was open to engaging with Mr Moniz.
Mr Moniz said the reporting of all the required cost and supply data points in the legislation, which include the likes of freight cost, tax, vendor, tariff code, item number, product description and duty information, has been a massive undertaking.
Several staff members including himself and the chief executive carried the workload at extra expense to the company.
He said that creating the systems required had cost between $7,000 to $10,000 in-house, although that price could be doubled if done by an external company, and that ongoing compliance costs were in the region of $1,500 per month.
Now the system has almost fully switched over, reports take about 30 minutes per container to complete — all before extra work on the pricing end.
The Cost of Living Commission Amendment (No 2) Bill 2026, aimed at expanding the powers of the Cost of Living Commission, was passed in July by the House of Assembly but delayed by the Senate after resistance from retailers.
Mr Moniz said he might have to hire someone to carry out the work and while that cost would initially be absorbed, it would likely eventually result in higher prices at the checkout.
“I think we need to slow down a little bit so we can find the right way to comply in a less costly way,” Mr Moniz said.
“I’m not even sure if the Government knows how much it is going to cost them.”
Mr Moniz questioned whether the effort would be worth the outcome.
“You are putting all of that effort into what, exactly?
“You have to look at the cost benefit analysis. It is $4.6 million in savings for the duty relief. What does that translate to per household? About $3 a month. You are throwing all these tax dollars away to save people $3 a month?”
A Ministry of Home Affairs spokeswoman responded last night that the views of Phil Perinchief on the island’s cost of living did not speak for the Government or the ministry.
“Any figures or characterisations he has offered on retail markups are his own,” she said. “The Government has not published evidence that grocery retailers in Bermuda routinely apply markups of 300 to 500 per cent, and it has reached no such conclusion.
“The Government values its relationship with Lindo's. Lindo's has been the most consistent participant in providing information to support the work of the Cost of Living Commission, and the ministry has recognised that publicly. That co-operation has strengthened the commission's work and is appreciated.”
She added: “The ministry has consulted retailers at every stage. The reporting template now in use was reviewed and approved by retailers at an in-person stakeholder meeting convened by the ministry, following working sessions, telephone calls and individual clarification letters answering each query retailers raised. The template was built on what retailers at that meeting unanimously described as an easy export from the inventory platform most of them use, and the commission designed it around its detailed knowledge of that platform. Retailers were also offered a format that would have connected directly with the commission's systems and reduced manual work. They declined it and chose the format now in place.
“The ministry has heard the concerns about burden and continues to refine implementation. The 2026 Regulations require the commission to consider the size and capacity of each business, provide technical support where needed and accept alternative reporting methods where a business cannot reasonably use the specified system.
“The commission is also developing a framework with Customs to draw on information Government already holds through CAPS, so businesses are asked for additional data only where necessary.”
Mr Moniz said he believed there were better solutions.
“I completely understand the desire to see that retailers are following through, but simplify the process — when you declare goods to customs, you never know when you might be audited,” he said.
“That already happens. The threat of an audit keeps you honest because you never know when they are going to show up.
“In the same way, do it with this. One container a month and then maybe you slow it down as people prove their compliance
“My suggestion is also to take a targeted approach and assist the people who need it the most. We do have it already with the Department of Financial Assistance.
“I also suggest targeting freight. The Government should be giving food a break on freight costs.”
Under the delayed legislation, price increases on covered essential goods would be limited to 5 per cent without explicit ministerial or commission approval.
“I am hoping for a delay in that requirement; that is the only thing I can hope for now,” Mr Moniz said.
“The 30 days they say they have to then tell me that I have permission to change that price is unmanageable, especially if it is perishable.”
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