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Wharfage hike hits consumer in pocket

A barely-noticed tax rise will send food prices up, wholesale distributor Butterfield & Vallis warned yesterday.

Wharfage fees will be hiked 13.6 percent from 1.1 percent to 1.25 percent as Government takes over responsibility for their collection from the Corporation of Hamilton in April.

This will send the relating fee on a $20 item from 20 cents to 25 cents impacting disproportionately on poor families most likely to suffer from soaring global food prices, according to critics.

Butterfield & Vallis president Jim Butterfield said it's another example of taxpayers paying the price for Government's overspending.

And Bermuda Democratic Alliance chairman Michael Fahy said the ability to collect and increase wharfage fees was the real reason Government pushed through the controversial Municipalities Act last summer.

The rise was passed by the House of Assembly last Wednesday in the Customs Tariff Amendment Act, which allows Government to levy importing fees traditionally collected by the Corporation; for many years the fee has been fixed at 1.1 percent.

Ed Sousa, of Butterfield & Vallis' consumer products division, told The Royal Gazette: “The fee of 1.1 percent has been in place for as long as I can remember. On the face of it, it may seem harmless, but this increase in cost is being passed onto the consumer. It may not seem much, but it's another bit of bad news for the consumer.

“We have had a lot of warnings that prices are going up. Up to this point in time, we haven't seen much at all, but the tsunami is coming.”

Mr Butterfield said: “To me, the first thing is the fact Government has overspent and now we all have to shoulder the ability to recover that. That's not something we can shy away from.

“They are looking for a way to recover some revenue and this is across the board.”

Premier and Finance Minister Paula Cox has said wharfage fees will generate $6.2 million for the next fiscal year.

Government will give the Hamilton municipality a grant of $5 million to compensate for some of the fees it will no longer be able to collect, while another $700,000 will go to the Corporation of St George.

The remaining $500,000 will support the planned revenue-sharing scheme between the two authorities.

Both Opposition parties have already called for families to be given help ahead of a soar in global food prices predicted by the Food and Agriculture Organization as a result of high oil prices in the troubled Middle East.

Mr Fahy said of the wharfage fee increase yesterday: “It's not a minimal increase. It's a 13.6 percent increase. That's going to have a serious impact on food prices and everything.

“It will be on all groceries. Think about the price that could mean to your overall food bill at the end of the week. The consumer is the one that will pay. It's a stealth tax.

“The debate in the House of Assembly was more based on the fact that fees were now being taken out of the hands of the Corporations.

“But this is exactly the reason they did that: so they could raise wharfage fees and collect more money.”

Former United Bermuda Party leader Grant Gibbons said: “This effectively will increase the cost of goods that will come in through the Hamilton docks.

“From 1.1 percent to 1.25 percent may not seem like a lot, but it will effectively make goods, food and clothes more expensive.

“The rise may also be magnified because the mark-ups are not necessarily direct.”

Dr Gibbons warned of the potential for further increases in wharfage fees in years to come.

“That 1.1 percent has been pretty stuck like that for years and years,” he said. “Now it's a Government fee, as we have seen with duty and payroll tax, it's easier for them to increase that for revenue than when the Corporation was collecting it.

“There is now more of a temptation on Government's part.”

going up: A worker in the US moves food products. An increase in wharfage fees is likely to increase food prices in Bermuda, say wholesalers.

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Published March 16, 2011 at 10:00 am (Updated March 16, 2011 at 10:03 am)

Wharfage hike hits consumer in pocket

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