Commission To Assess Food Pricing

July 15, 2011

The Premier and Minister of Finance, Paula A. Cox, today [July 15], announced that she is calling on the Price Control Commission to conduct an enquiry into local food pricing.

The Minister said, “Government will use the powers of enquiry available under the Price Commission Act 1974 to obtain information from food importers about their import costs and margins to ensure that consumers are protected from unwarranted price increases.”

Full Ministerial Statement:

Mr. Speaker, I rise this morning to advise Honourable Members of the enquiry to be conducted by the Price Control Commission

Honourable Members should be aware of Section 9 of the Price Commission Act 1974 which states the following:

Minister may require Price Control Commission to conduct inquiry

9. The Minister may at any time require the Commission to inquire into —

(a) any matter which may affect the exercise by him of his powers under this Act;

(b) the price or charge made for any commodity, whether or not such commodity is a specified commodity;

(c) such other matters as he may specify concerning the cost or supply of any commodity,

and it shall be the duty of the Commission thereupon to make such an inquiry and to report thereon to the Minister.”

Mr. Speaker, Honourable Members will recall that in the budget brief for the Ministry of Finance in March 2011, I made the following statement:

“Recently, the prices of food staples in global commodity markets have risen in worrying leaps. The Ministry of Finance has considered the implications for Bermuda and the policy options available to Government.”

“Given that Bermuda imports substantial proportions of the food consumed on Island, we are in the position of ‘price takers’. In these circumstances, a regime of price controls could have unintended consequences including the disruption of supply lines.”

“Accordingly, Government will use the powers of enquiry available under the Price Commission Act 1974 to obtain information from food importers about their import costs and margins to ensure that consumers are protected from unwarranted price increases.”

Indeed, subsequent to this statement, both the Bermuda Public Services Union and the Bermuda Industrial Union have publicly echoed my own concerns.

Mr. Speaker, I am pleased to announce that the Price Commission has been empanelled and gazetted. The members of the Commission are Ms. Lucia Peniston, Mr. Anthony Richardson and Mr. Daniel Reece.

Mr. Speaker, Given the uniqueness of this enquiry, I have charged the Commission with a specific terms-of-reference which includes:

1) Obtaining the relevant economic data from the Department of Statistics to identify the essential goods and services that should be the focus of the enquiry;

2) Inviting interest groups, consumers and individual Bermudians, who wish to provide data, statistics and other information, to make submissions to the Commission;

3) Inviting input from wholesalers; supermarkets; convenience stores, discount stores, other businesses and services that provide essential goods and services;

4) Consulting with the various unions including: the Bermuda Trade Union Congress, the Bermuda Industrial Union, the Bermuda Public Services Union, the Fire Services Union, Bermuda Union of Teachers, the Prison Officers Union, etc.;

5) Consulting with the Bermuda Small Business Development Corporation, and employer groups including the Chamber of Commerce, Bermuda Employers Council, etc.;

6) Obtaining information from shipping companies and other importers regarding the current cost of shipping, both air and freight;

7) Producing a report for the Minister recommending how Government can assist in ensuring that consumers can get the most reasonable price for essential goods and services.

Mr. Speaker, we must ensure that consumers are protected from unwarranted price increases while suppliers continue to remain profitable. As a result, this will be a collaborative team effort between Government, suppliers, retailers and consumers.

Thank you, Mr. Speaker

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Comments (59)

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  1. Shaking the Head says:

    Will the Premier also set up a Commission to ensure taxpayers do not get ripped off by untendered, unsupervised, unoverseen, untransparent, unethical but not illegal contracts? And make it retroactive to 1409?

    • Black Soil says:

      This is just another smoke screen by the Premier. Just an attempt to make it look like she is doing something. When you “pull back the sheets” and see how bad this island is doing financially, one can only conclude that Bermuda is living on borrowed time.

      • Vote for me says:

        @ Black Soil
        If we are realistic, this is an excellent response to public demand about certain prices. The challenge for all Bermuda residents is to identify what essential goods and services really are.

        We accept that they include bread, milk, certain fruits and vegetables, cream, rice, flower, tuna fish (apparently) etc but what else?? I hope that we can all be constructive in this process since we wil all benefit.

        Being realistic, we live in a market economy so we will have to be very careful where we go with this but if we can properly define what is essential and limit the review to essential items, we should be able to make a very good start.

        Lets get going with some constructive comments!!

        • Black Soil says:

          If the govt had just governed responsibly we wouldn’t be doing this exercise. My constructive comment would be for the govt to sponsor the creation of an independent Office Of Procurement and also an independent Tourism Authority to enable the govt to take politics and corruption out of the decision making process and ensure Bermuda gets value for their money. Do that, and you have my vote.

        • Positive Comment says:

          Another construction comment is this. The cost which is choking us all is not food. It’s the cost of govt and the cost of business moving away from Bermuda because the PLP have turned Bermuda into an unwelcoming jurisdiction. Comment??…here we go….reduce the cost of govt (too many are employed in govt doing nothing) and make IB feel welcome again. BTW…Bermudians spend so much money on booze and drugs that I doubt it is the cost of food hurting us. Oh…and the cost of cod fish which the Premier says is a “staple”. Give me a break!!!!!

  2. 26 says:

    Brace yourself Jim, Butterfield and Vallis is next!

    • Outraged says:

      It is outrageous to think that a Minister of Finance who has wasted hundreds of millions is now pointing the finger at Bermuda’s food industry.

      • sandgrownan says:

        It’s about never accepting responsibility. PLP MO.

    • nowayout says:

      Amazing how the Bermudians complain about Cox this and Cox that. You Bermudians voted her in

      • PEPPER says:

        Yes cox was voted in…and we complain Cox this and Cox that…but GUESS WHAT…if she calls an election two weeks from what ever …she will get the votes that she needs …because right now she is BS the public !!!
        Paula needs to give up finance..she has ruined this Island by letting the former premier get away with his out of controlled spending !!!madam premier has a lot to answer to…(and to think she still has Commisiong as her advisor and the angry senator by her side……WHERE IS HEATHER JACOBS ?or is she a part of this corrupt gov..

      • Apocalypto says:

        The cabinet ministers voted her in, not the mass population.

      • Scott says:

        noooo…it was the majority of the members in her constituency that voted her in…

        that’s all the say the public every had on the matter

    • The mon says:

      @26 the Butterfields are not worried they are untouchable just like the Dunkleys and Gibbons Remember people with out Economic power there is No power talk is cheap.

      • Todd says:

        @ The mon – 26 is refering to how Jim Butterfield was forced to give up Bermuda Cement by this Government. Untouchable? Think not?

  3. false economy says:

    The high prices of food aren’t a worry if you don’t have anything left over to spend after being gouged by the exhorbitant prices of rent.

  4. Organic Bermudian says:

    Finally someone is listening to the consumer! I am sooooo sick of hearing how the cost of shipping is what has driven up food price I ship single items and pay shipping and wharfage fees and am still saving money that the GREEDY merchants here claim is necessary to cover their cost!! I hope they will ALL be exposed!! Go after clothing and electronic providers also! GREEDY HAFFAS!!!!

    • This i know!! says:

      It is great to look at the savings, but do you pay for rent to sell the products, wages for staff, gov tax, and all the rest. You are saving now but when you need something soon and there is no store down de road to run to lets hope you have a card that is being paid for cause you have a job that is not in retail.

  5. Thinker says:

    So now the we target the price of food…. Yes it’s expensive ( do we need to pay someone to tell us that)….

    So we ask the importers and shops to lower their profit margin… And as a result they make staff redundant.. So those of us that are working have to pay. Um um.. 5% less and the rest get to dip into their pension (what happens to them when they retire?)

    And those of us that can afford to pay taxes get to pay for our ministes trips to here there and to the stars!

    • James says:

      What nonsense. It’s the same argument for employing cheap construction labour. The reality is that the margins are big enough for these folks to hold cost and still make good profits.We listened to the construction chiefs complain about Bermudians not wanting to work when in many cases these companies just didn’t want to pay the unionized rate ( F you BIU for allowing this to happen). We also waited for the construction cost to lower, you know, because they hired cheaper labour. But no,it stayed the same and you guessed it, these construction folks made bigger profits . So what we achieved was highly inflated housing cost and for those poor folks that happened to buy at the top of this economic bubble, they are now paying the price with a market correction. In short, they paid way to much for houses that are now worth hundreds of thousands of dollars less than what they are PAYING for. Many of these folks built these houses on the belief that there would be an expat work community around to rent their digs/pay their mortgage. And yes that worked for a while, but now the GOB are considering opening the home ownership market to this group. And how did we allow the owners of the Elbow Beach Hotel to enter the apartment rental market.I thought that they were in business as foreign HOTEL owners to run a hotel, oops they where, albeit a hotel that was once 300 rooms, reduced to 240 now, what, 90 rooms, plus who knows how many apartments on top of that hill. Business folks complain about the PLP and I don’t know why:
      1. Ex-pat workforce went from 18% under the UBP to 30% under the PLP
      2. The Elbow Beach owners, Tuckers Point owners, Ariel Sands owners etc etc have been allowed to enter the real estate sales market and yes in the case of the Elbow Beach, real estate rental market when under the UBP, hotel owners understood their role and that was to rnanage hotels not these hybrids that are looking more like real estate sales and less like hotels.
      And by the way, corruption wasn’t a sickness that surfaced 13 years ago. Yes what has happened under the PLP is vile and destructive but UBP and now OBA followers would have you believe that the name 40 Thieves meant something else. Folks, Affirmative action, quota system, however you refer to it was the sole domain of white men in this country for as long as most of us can remember. I know that I don’t have to provide details because we ALL know this to be fact. But what I and my friends didn’t count on when the PLP took office was more of the same, albeit, with a twist. The 40 thieves changed to a much smaller group of bandits and the PLP folks have been a bit more inclusive as our Portuguese construction brothers have done extremely well. Folks, the lesson learned over the past 13 years is that politics in Bermuda has nothing to do with Black or white but more to do with ‘to the victors go the spoils’. What we have learned is that there is a very fine line that separates racism and elitism. The ugly truth is that, IT’S all about the money. So we can sit around a fight about political philosophies / platforms, but the reality is that we live in a country that worships money. White or black, local or foreign, our differences are small.

      • Do right says:

        James you got it right boss man!!!! Surprised bloggers aren’t getting what you are saying. Government guaranteed Lopes Construction that they would make a profit on Loughlands project. Did i say GUARRANTEE! Shucks they could have commissioned Works & Engineering to build it or at the least used their qualified project managers to manage construction. Why would Government even want to have someone profit from a project that is supposed to be social in nature. But no we give it away to Lopes who in turn hires foreign labour(remember this a Bermuda Govt project) and guarantees that 100 plus workers of foreign decent are employed for 4 plus years while Bermudian masons, carpenters, electricians beg for work elsewhere. A black Government did this to their own people!!!! Butch ‘punk” Furbert didn’t even whisper because he is too cozy with Government officials rather than fight for his dues paying members of BIU. This island has turned into a dog eat cat society. Many Bermudians are hurting now but particularly black people after seeing their Government turn their backs on them. Reminds me of the Braveheart movie when William Wallace was betrayed by his own people while fighting against British. God save us!

  6. Pitts Bay says:

    Perhaps they can have a review of what we get from our Government Ministers. Are we being overcharged? Are we getting value for money?

    There is little difference at the end of the day between products and services, and government and ministerial service is NOT imported, so there is no fixed cost and no import duties, and we ALL pay for it.

    So, are we getting value for money? Are we being overcharged?

    I think so.

    • Pitts Bay says:

      To be clear, I do NOT think we get value for money !!!

      • Pat says:

        Pitts Bay that is the truth!!! We don’t get value for money in Bermuda. We want to eat healthy but the fresh produce is all bad and expensive. I agree that the junk food is not cheap either but at least you don’t have to eat it in its spoiled state the day after purchase.

        As for other services, they have are all out of wack.

  7. I Can do Math says:

    This is long overdue. Lindo’s charging $14.99 for a watermelon- really?!

    • MAN ON THE MOON says:

      So Lindos charges $14.99 for a watermellon…its big , heavy and perishable and must be either flown in or shipped in on a refridgerated container and sold before they go bad. I personally do not mind paying more for fresh fruits and if I don’t like it ..I can grow it myself. Canned goods…thats a different story. However, why does no one make noise about the 3X , 4X , 5X or 10X more that we pay on “professional” services. There is no freight, warranty, import duty on someones time. Yet if you have ever had to use the services of a doctor, dentist, architect, banker, engineer, accountant, architect or lawyer and compared prices compared to the US for a “professionals” TIME and “EXPERIENCE” while in their air conditioned enviroment…. you know exactly what I mean. Why are we not looking at price gouging in these areas? Might it be because most politicians tend to be doctors, dentist, architects, accountants, bankers and lawyers?

      • Free Thinker (Original) says:

        On perishable foods, if they were more affordable, they would sell a lot more in a shorter time. When mangoes are on special, for $1.99 each, I bought three dozen, when they went back to $2.99, I bought none!! and I only buy the fruits that are on specials. This I think is what most people do, so this is why those fruits have a high spoilage rate. If these knuckle heads just use a little common scene, they will make more on volume and have less spoilage.

        • Scott says:

          i’m quite sure their finance department has run the calculations on cost vs quantity… and as such i would assume the price the charge is what gets the most money. just because one person doesnt buy them doesnt mean others arent either.

      • Scott says:

        to be honest, one cannot really complain about prices when shopping at lindos, or miles… they are known to be higher end stores. if you want a cheaper watermelon, go to marketplace or supermart… with all due respect, its not like you dont have cheaper options… now if our less expensive stores sold it for that cost, then i’d say you have a reason to complain.

  8. Malachi says:

    I think Paula needs to start with the banks and their interest rates. Why are we paying 6.5% to 7.5% when in the USA one can get a 4% rate??

    • Vote for me says:

      Malachi, do you think interest rates should be considered as part of the essential goods and services?

  9. MAN ON THE MOON says:

    By cousin had plans drawn by an architectg to build a house in Florida…$3,000. I had by plans done two years ago….$18,000 and they wanted to charge me a fee to manage the project!!!! Two professionals…same education, same equipments…software is duty free…hmmmm. They must be charging more becuase of the price of food!!!!

  10. Vote for me says:

    I think the Price Commission review is excellent. It would be interesting for some of the regluar Bernews (and other) bloggers to constructively identify what they think essential foods are. I invite responses to this post.

    • Scott says:

      it is a good point. frankly, i think people do not simply buy essentials.

      to go and get whatever meat is on special.. some veg with that, perhaps a large bag of rice.. perhaps some eggs… put those together and you have what i would call “essentials”.

      i think far to omany look at hte nice packaged foods, and freak out at the costs without realizing that there are far cheaper, and less processed foods ready to go.

  11. Kathy says:

    Its about time someone is looking into the prices of food is ridiculous. Not necessary especially when they are buying in bulk. Most wholesalers rip of consumers as well. Fresh n New in devils hole keeps their prices nice n low compared to Arnolds and the rest. Great deals at Fresh n New.

  12. kiskadee says:

    The price of fruit and veg in Lindos is ridiculous.$4.99 for a small punnet of tomatoes that is $2.99 in the Supermart. Items are are not priced so you dont know what things cost till the cashier puts it through.

    • No kidding says:

      No kidding. Miles pulls the same shizzle on their produce. I got distracted at the cash register yesterday and only realized that I had been charged $18.99 for a bag of cherries when I got home!

      Will this commission also be looking at the price gouging by local producers? I think that nearly $6 for a quart of milk that is purportedly locally produced (can so few cows really make so much milk?) is a bit steep. And about the same price for a bag of hairy, near rotten carrots? Something is not right here!

  13. kiskadee says:

    It is also time for a commission on what doctors and dermatologists charge.We used to have a wonderful dermatologist who came in from Canada every few months and each visit was about $22 after Insurance.Now the ”Bermudian???” charges $300 for a first visit then she gives you an appointment for a check up in 6 months where you pay $250 for a 10 minute visit. These have to be paid upfront as you leave. Not only are we being ripped off but so are the insurance companies.Dr Cann needs to do something about this daylight robbery soon.

    • Free Thinker (Original) says:

      I think the Doctors should be able to charge what they want. It’s just that we need to be making healthier food choices and keep active. So we wont need to visit the Dr. as often as we do. If the Gov. does it right, we should be able to make those choices with more ease. (Read my post below)

    • T says:

      @ kiskadee – I TOTALLY AGREE!! These doctors charge too much money nowadays! There should be a limit to this as your co-payment does not increase over the years. Only your portion of deductions for insurance.

  14. Free Thinker (Original) says:

    Not such a bad idea, considering that we don’t have real competition in this area. I do think that Gov. should take the lead in this and start by removing duties from all fruits, vegetables and healthy food staples, i.e. Brown rice, whole grain cereal, eggs, etc.. etc… Then increase the duties on junk food especially SODA!!! WHICH I THING SHOULD COST ABOUT $10 PER LITRE.

    This will give the average person the opportunity to buy healthy foods, (by default)because it will be more affordable and junk food will be (by default)a luxury item.

    The Gov. through price control, will see to it that these duty cuts are passed on to the consumers and this I think, should be the extent of the price commission involvement. This will be a win win situation for the supermarkets and the consumers. The super markets can set whatever margins they want to set, (on junk foods)and people will be able to afford healthy foods, which will lower the rate of DIABETES and the other associated diseases, cased by people eating this crap! WHICH BY THE WAY, IS WHY OUR HEALTH CARE COST IS THROUGH THE ROOF!!

    • ms perrier says:

      Does that include soda water too ? ?

      At any rate , until we can get our housing costs back down to sustainable levels ..WAY down too.. not the little decrease we currently see in some areas, nothing else is going to change pricewise.

      • Free Thinker (Original) says:

        I have no idea what soda water is, but if it’s loaded with cancer causing chemicals and as such, is contributing to people being unhealthy, then it’s included. Please note, I am not saying people should not eat junk food, but if it’s cheaper than real food, then the people who needs to eat less of it,(junk food) will be the ones that eat eat more, because it’s cheaper. Lets switch that.

      • Rockfish#2 says:

        Whatever the Government can do to reduce our expenses is welcome. However, the biggest burden faced by the average Bermudian is rent, which is often excessive! A former Senator once described most landlords as “rapacious”.

  15. Bwermp Bermp says:

    RIGHT NOW I COULD EAT A NICE GRAFF BEEF PIE

  16. PAS says:

    So, we all agree, we want a government that has proven it cannot manage finances to probe and regulate businesses that have proven they can. Hmmm.

  17. Keeping it unreal says:

    Stateside go to a $1 store and buy bread for $1
    60 loafs of bread at $1 each, saving $5 on each = $300 to cover cost of plane ticket, with another $40 still duty free to bring back to make it profitable (and cover cost of second checked bag), perhaps some white grapes which seem to be the most expensive fresh fruit item on the island…

  18. thumbs up says:

    I commend the Premier for this step. People have been complaining about the exorbitant prices of staple goods for a while. And she has made it clear that the importers and grocerrs etc will be consulted as well. I give the Premier full credit for this decision. I don’t agree with everything the government has done but I have seen some very positive movements lately and am increasingly pleased with this administration.

    • LOL (original) says:

      It’s election time as to why your seeing positive things. I agree w/ the PLP on this is long over due I hope they expose this report so we can see all the facets of this industry and who is over charging whom.

      LOL this also is another point to electing the other party every some many years keep them doing for the people and not them selves.

  19. O I C says:

    y’all need to grow your own vegetables. its really not that hard.

    • ms perrier says:

      Pity , plants don’t grow well in concrete and asphalt…otherwise we’d have a roaring industry here .

      • Me says:

        After spending nearly $9 on 3 tomatoes last year, I started growing my own, and haven’t bought any since! Btw, you can even plant when you don’t have a yard with a simple wooden box and some soil. You’ll be amazed at what you can grow and how much you can save!

  20. Brillant !! Good move Premier COx, “Mr. Speaker, we must ensure that consumers are protected from unwarranted price increases while suppliers continue to remain profitable.” There has to check and balance to ensure tha tprices are not push up for the sake of saying it is the recession.

  21. Triangle Drifter says:

    What is it these days? One in five on the Government payroll or is it one in four? Thats where our expenses are. This is just another attempt to deflect blame for hard times onto some other group instead of the Government which never has done anything in an efficient manner.

    Supermarkets have been importing directly from jobbers for decades to bypass the local wholesalers & bring better prices to the shelf.

    Bermuda is nothing but a little town. It cannot get better pricing through high volume. Nothing is exported (except expats personal effects these days) so we pay for round trip shipping. It costs as much to run a freighter unloaded as loaded. Bermuda has had the most expensive inefficient docks for decades. Duty has to be paid & financed up front for goods that sit for who knows long before sold. Retail store overheads are high. The list goes on & on. It all adds up.

    Perhaps The Cog whould serve the population better by cutting the massive waste in Government & cut the vote buying jobs created in the past ten years.

    Nah…never happen.

  22. Anon Omus says:

    You gotta love how these people who have no idea about the grocery industry try and make “educated” comments about why food prices are so high and they always end up pointing the finger at the grocery store itself. The real problem is the local wholesalers who for the most part have a substantially higher markup than the store itself. In some cases you are looking at a 60% markeup just from the local wholesaler. Grocery chains prices in Bermuda are strickly dictated but what they are charged from the wholesaler, in some cases they are handcuffed by them. But more and more stores are bringing in their own goods from jobbers stateside to bypass these greedy wholesalers and offer the consumer better pricing.

  23. Just an idea says:

    With high food prices how come there are so many fat asses on the island put a tax on food pay off gomint dept
    And make people slimmer and healthy .
    People say there is nothingto do but eatin bermuda

  24. Just an idea says:

    People need to be careful what they compare to for example a punnit of blueberries the plastic no flavour type for example will not be the same taste quality and flavour as organic or grade A B or C
    U get what u pay for .
    Government should regulate the basics like milk flour butter sugar eggs with these items you can make alot hello yes cook and eat healthy grow garden basics .
    And encourage people to stop eating the modified corn syrup crap

  25. Pat says:

    Good Job Premier Cox, it is about time that someone take the lead and start looking at the prices in Bermuda on EVERYTHING!!! The Consumer here is being choked to death and we have our hands tied because we have to eat, have a roof over our heads, go to the Doctor and Dentist at some point and the list goes on.
    Another thing that needs to be stepped up is the Health Department inspections on supermarkets. I walked into Heron Bay Market Place on Friday and the stench from the rotten fruit (especially Watermelon) was overwhelming. We pay high prices for rotten fruits and vegetables. You see them in the supermarkets all wilted and stale and you pay for them and get home and they are covered in mildew by the next morning. Berries are the biggest culprits. You have to really examine the container to make sure there aren’t rotten berries in the package. I had to take back a container of berries to Lindo’s on Friday. I can’t understand why they store don’t inspect their produce daily like they do in the U.S. and dump the stale food.

  26. New Day, New Thinking says:

    Lets restrict what a private venture can charge so that goverNment can spend what they want. Wake up. The food business is competitive. People pay for value. Balancing price/volume is how its done and how it should be done. Remember all the food importers pay their wages, taxes and duties too. Why doesn’t goverNment lower those costs if they are so concerned. Crocodile tears is all the PLP has.