Investigating Complaints Of Price Gouging

December 7, 2018 | 13 Comments

Minister of Home Affairs Walter Roban provided an update on Consumer Affairs’ efforts to investigate complaints from the public regarding alleged price gouging.

Speaking in the House of Assembly today [Dec 7], the Minister said, “Consumer Affairs has received a number of complaints about the hike in prices of certain staples. Persons have complained that some food retailers have tried to blame the rise in the prices on the new sugar tax for goods that are not covered under that tax.

“Similarly, persons have also sent me pictures of fresh vegetables with prices that appear to be exorbitant.

“The Consumer Protection Act 1999 gives Consumer Affairs the authority to investigate complaints of price gouging. This comes under the heading of “Unfair Business Practices”.

“In Bermuda where we import the majority of our foods and materials, it is often difficult to assess fair pricing. Rising food prices are a global issue and, as Bermuda is part of the global economy, we are also affected.

“Pricing, however, is subject to many variables such as global market influences, natural disasters and conflicts, product volume and country of origin, negotiated price, shipping, customs duty, taxes, local operational costs – to name but a few. In addition, many of our items are shipped in smaller quantities which drives up the price per unit.

“In addition to the costs to import food, we must also take into consideration that retailers must add on a percentage to pay their staff, operating costs and to earn a profit to keep them operating. This also applies to fresh produce. Our farmers must also pay import costs for seed and other supplies in addition to paying staff and other operating costs.

“We appreciate that Bermuda businesses are facing a shrinking market share; higher operational cost and a decline in consumer spending. But we must also remember that the high cost of food contributes to the high cost of living that impacts the quality of life for most of the general public.

“It is incumbent upon us that we be vigilant and informed consumers that will check prices before buying; know which foods are in season and, if looking for fresh foods, support our local farmers. Consumers can also question any exorbitant price changes with Store Managers because sometimes the pricing may be the result of human error.

“I want to also assure the public that Consumer Affairs will continue to investigate all complaints of alleged price gouging whether food or services.”

The Minister’s full statement follows below:

Mr. Speaker, I rise to highlight Consumer Affairs’ efforts to investigate complaints from the public regarding alleged price gouging.

Mr. Speaker, Consumer Affairs has received a number of complaints about the hike in prices of certain staples. Persons have complained that some food retailers have tried to blame the rise in the prices on the new sugar tax for goods that are not covered under that tax. Similarly, persons have also sent me pictures of fresh vegetables with prices that appear to be exorbitant. Unfortunately, with the higher seasonal demand on certain goods, it seems that the price of certain items are always higher this time of the year. This year, as has been true in recent years, some persons are having to forgo enjoying their traditional foods because they are finding it harder to make ends meet.

Mr. Speaker, Honourable Members and the general public may not be aware that the Consumer Protection Act 1999 [the Act] gives Consumer Affairs the authority to investigate complaints of price gouging. This comes under the heading of “Unfair Business Practices”. Section 11[1] [b] [ii] of the Act states the following:

11 [1] For the purposes of this Part the following shall be deemed to be unfair business practices—

  • [b] an unconscionable consumer representation made in respect of a particular transaction and, in determining whether or not a consumer representation is unconscionable, there may be taken into account that the person making the representation or his employer or principal knows or ought to know—
    • [ii] that the price to be charged will grossly exceed the estimated or quoted price, or that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;

Mr. Speaker, as you are aware, in Bermuda where we import the majority of our foods and materials, it is often difficult to assess fair pricing. Rising food prices are a global issue and, as Bermuda is part of the global economy, we are also affected. Pricing, however, is subject to many variables such as global market influences, natural disasters and conflicts, product volume and country of origin, negotiated price, shipping, customs duty, taxes, local operational costs – to name but a few. In addition, many of our items are shipped in smaller quantities which drives up the price per unit.

As an example, you would have also been aware of the recent recall right here in Bermuda, of romaine lettuce. A few days ago, there was a story on the US news about the recall of certain beef products. The scarcity created by these recalls pushes up the purchase price, particularly when they have to be purchased from countries further away than the US. Because of the greater distances, the cost of shipping will also rise.

Mr. Speaker, in addition to the costs to import food, we must also take into consideration that retailers must add on a percentage to pay their staff, operating costs and to earn a profit to keep them operating. This also applies to fresh produce. Our farmers must also pay import costs for seed and other supplies in addition to paying staff and other operating costs.

Mr. Speaker, we appreciate that Bermuda businesses are facing a shrinking market share; higher operational cost and a decline in consumer spending. But we must also remember that the high cost of food contributes to the high cost of living that impacts the quality of life for most of the general public.

Honourable Members would be aware that a good indication of how the prices will impact spending on food is through the Consumer Price Index [CPI] provided monthly by the Department of Statistics. The index for their food basket consist of sixty [60] food items listed under the following ten categories:

  • 1. Bakery Products
  • 2. Cereals and Cereal Products
  • 3. Dairy
  • 4. Meats and Fish
  • 5. Oils and Fats
  • 6. Fruit
  • 7. Vegetables
  • 8. Sugar and Confectionary
  • 9. Prepared Foods and Snacks
  • 10. Non-Alcoholic Beverages

The average annual increase of prices for food since 2013 ranges from a low of 1.4% to a high of 3.1%; as compared to income for most consumers that either remains static at best or decreases at worst.

Mr. Speaker, It is incumbent upon us that we be vigilant and informed consumers that will check prices before buying; know which foods are in season and, if looking for fresh foods, support our local farmers. Consumers can also question any exorbitant price changes with Store Managers because sometimes the pricing may be the result of human error.

Having said that, I want to also assure the public that Consumer Affairs will continue to investigate all complaints of alleged price gouging whether food or services.

Thank you. Mr. Speaker

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Comments (13)

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  1. Jonathan Land Evans says:

    The section of legislation that is quoted doesn’t seem relevant to what is being discussed.

  2. Trufth says:

    The sugar tax is being spread across the whole store and this is not fair nor is it the intention of the tax.

    An example (and simplified):

    A $10 cake SHOULD now be +50% = $15

    Instead, the cake is now $13 but the price of garbage bags has gone up $2 to make up the difference.

    Here’s the problem: for some of us, the cake at $15 (or even $13) is now no longer worth it (the tax WORKED!) HOWEVER, the price of other items has gone up. Why am I being punished by doing what is right?

    • Double S says:

      Well since you’re not paying $10 for a cake then you still save money despite paying $2 more for garbage bags.

      What you have failed to take into account is the additional tax burdens the PLP has decided to place on companies to date. One glaring example is the massive increase in commercial land tax. And it will only get worse once they approve the fact if new taxes designed to squeeze the local consumer to pay off irresponsible government expenditure. Just think how much more expensive things will get if they pass the proposed 70% in increase in the foreign currency purchase tax alone.

      Sorry but if you think raising taxes will somehow keep prices stable or decrease then you should enroll in an economic course at the college.

      PLP taxes will kill what’s left of Bermuda ‘s already struggling economy.

  3. question says:

    If you increase taxes, you increase prices. I think everyone has been telling the government this for months.

    Putting up prices is not ‘price gouging’. If you can buy an item cheaper somewhere else, do it. No one is concealing the price. If it’s too expensive, don’t buy it.

  4. Onion says:

    Perhaps they can look into medical scan pricing? There’s a clear case of price gouging in MRI scans.

  5. red rose says:

    maybe if the sugar tax had not been introduced there would be no price gouging?

  6. Overcharging says:

    Someone in .Government should seriously look into the price gouging that takes place when people use the taxi app. Sometimes the price is double.

  7. Guy Carri says:

    lmao. In otherwise, our investigation will show we cannot tell companies what a fair price is. They have bills to pay, you have a family to feed. Pay up and I’ll show face to calm everyone down that it’s all legit.

  8. Toodle-oo says:

    First off , even though being staffed by very nice folks , the CAB is a toothless poodle. I’ve had more experience with them than most can imagine and I’ve only gone to them out of extreme desperation when all avenues have been exhausted . Instead of calling the service providers (who they admit they already have files full of complaints on) and asking what’s going on , they tell you that what YOU need to do is this , or what YOU need to do is that. Well hello , the reason I’m here is because all of that stuff that I ‘need’ to do hasn’t done diddly .

    Secondly , there’s still a lot of naive and gullible people out there who seem to think that the rules of the capitalist world elsewhere work in Bermuda as well . ‘The consumer is king and they set the price level’ they believe .. LOL ‘Competition takes care of these things and levels the playing field with the consumer coming out on top ! ‘ LOL LOL Such naivete .

    Here’s a few examples.(And I could give many more)

    A local businessman (and politician) imports eggs . He can get his imported brown eggs on the shelf for (at least) 50% less than local eggs. How is it that even after freight and duty and his markup they can cost 50% less than eggs produced here on the island ? (And I’m not even to go there as far as this whole ‘organic ‘ joke is concerned)

    A local ‘chef’ of sorts gets into the production of a line of ice cream products . Coincidentally they’re at the exact price point of an imported premium brand . Is the premium imported brand brought in freight , duty and dealer markup incorporated into price so very precisely priced that the locally made stuff can only compete by matching the price . Or in other words , is the imported stuff which is already ridiculously expensive , that fairly priced ?

    Another one .. Two fast food businesses on Queen Street mere yards apart selling a virtually identical product. When the 2nd company opened up the first said ‘We welcome competition’ . Did the first company lower their price ? How closely priced are the goods of the two businesses ? I think most people know the answer to this already .

    So , in the end , is the consumer ‘king’ in Bermuda ? Does competition work in favor of the consumer here ? Is there price gouging ?

    It really make one wonder when going somewhere else makes no difference at all.

  9. Healthcare , insurance…and groceris!

  10. PANGAEA says:

    Wrong tax at the wrong time.

    FOOD PRICES JUST WENT UP !

    Look like the Sugar Tax back fired as the shop keeper increased their prices to stay in business, Not all people put on weight as a result of sugar consumption, for many it is a medical issue and should be dealt with as such by doctors.

    I doubt if they consulted with their voters on this one.

    There are many other laws on the books today that do not work you would think we could learn from other countries bad judgements.

    The Government has been told many times to stay out of the kitchen and get with the economy, their taxing us all into poverty and a life style wraught with hardship .

    You cant tell me that import duty is not a sanction .

    This so called medical tax designed to confront fat people which is their problem in the first place where they have got to want to loose weight .

    Are they foodolics ?

    Making the rest of the country suffer with a tax discapline because of a medical issue is not what I considder good Governance .

    Repeal the Fat tax to the dusty the shelf.

    • Toodle-oo says:

      * Look like the Sugar Tax back fired …….

      I doubt if they consulted with their voters on this one. *

      They ‘consulted the public’ with a survey that because the questions were parsed to give a predetermined outcome the result was that an overwhelming number of voters appeared to be in favour of the tax.

      Meanwhile , take the time to look at the comings and goings of any given fast food take out operation , and the majority of whom offer very little if any sweet foods. You’ll quickly realize that a huge number of their customers have something in common . And the sugar tax isn’t going to fix their problem .

  11. Y-Gurl says:

    Where’s the FRIED CHICKEN tax? Fried food damages your health way more than a cupcake

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