Retailers offer explanations for rising food prices
Food retailers faced tough questions from consumers demanding to know why costs continue to rise.
The consensus from the Price Control Commission: make educated choices.
“Fixed price margins”, rather than price controls, are likely to emerge from the PCC’s deliberations, the three-man group last night announced at a public forum in Hamilton’s St Paul African Methodist Episcopal Centennial Hall.
In the meantime, in trying to decide the definition of an essential foodstuff, the group were challenged on the cost of mayonnaise.
“It seems prices go up on items that you know Bermudians are going to buy, no matter what,” audience member Esme Williams told Lindo’s owner Giorgio Zanol, and Ed Sousa of distributors Butterfield and Vallis.
“Why is it that since February, the price of a jar of Hellmans Mayonnaise has jumped from $5.47 to nearly $8?” she demanded. “Bermudians love mayonnaise. You pick the items you know they’re going to buy anyway.”
The panel, which included Age Concern Executive Director Claudette Fleming, statistician Cordell Riley and senior Bermuda College economist Craig Simmons, joined PCC members Lucia Peniston, Daniel Reece and Anthony Richardson in soliciting questions from the public on food costs and, where possible, wrestling with answers.
In the case of mayonnaise, Mr Zanol said, the cause was simple.
“It’s the price of corn,” he said. “You feed the chickens and the cows with corn. Last year in the States corn was the highest price ever. Mayonnaise is made with eggs and eggs are very expensive. It’s all a trickle-down effect.”
The use of corn for fuel has resulted in higher costs, even as rising oil prices also drive up Bermuda’s expenses, he said.
Bigger countries and large national suppliers also possess a bargaining power that Bermuda does not, added Mr Zanol.
“That’s the reality,” he said. “The companies give you a day to say yes or no to their deal. If you don’t buy it, China is going to buy it.”
Another audience member noted a 14 percent rise in the cost of coffee since February at a local supplier.
“Coffee went up by 19 percent last year,” Mr Zanol responded.
In a similar refrain to earlier meetings, the group singled out shipping costs to an isolated island as one of the top contributors to food prices that are two to three times that in the US, Mr Sousa said.
Store owner Ralph Adderley blamed rising costs of electricity and healthcare.
“If we can get those two things under control,” he said, “I think prices in general could hold steady.”
Noting that Bermuda’s population of senior citizens will double to 24 percent by 2030, Ms Fleming called for more coordination and sharing of data among donors of food, but cautioned against “messing with free market principles”.
The PCC must ultimately report to Premier Paula Cox in her capacity as Finance Minister, to give recommendations on taming costs of essential goods and services. Ms Cox has disavowed imposing price controls, however.
Ms Fleming advised consumers to educate themselves on their spending, and seek out cheaper products or go without certain items in the face of steadily climbing prices.
A consensus was voiced by Mr Simmons, who told the gathering of about 75 people: “Allow the market to do its thing. You don’t want to get a government involved in this.”
PCC chairwoman Ms Peniston said the group planned to hold more public forums in the East and West End, before compiling its final report for Government.
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