Senator Burt On Food Pricing Enquiry
Senator David Burt, the Junior Minister of Finance, spoke in the Senate this morning [July 20] on the Price Control Commission.
On July 15th, the Premier announced that she is calling on the Price Control Commission to conduct an enquiry into local food pricing, saying “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.”
Senator Burt said, “Food, like energy, is a fixed cost in our economy. If residents can achieve savings in these areas they will have more money to spend in our economy to support our economic recovery. The government already has zero rates of duty on essential food items such as Milk, wheat, rice, breakfast cereal, and infant formula; a 5% duty rate on meat, fish, fruit and vegetables, cheese, eggs, flours, oils, and fruit juices.”
“The great recession has challenged all of us, and as a community we must all respond. It is expected that everyone in the community, especially wholesalers and retailers for staple goods such as food, have a role to play.”
“While consumers are challenged it is only expected that as a community we all share the sacrifice in creating the environment to return our economy to growth. If we are all in this together, then all of us, including those in the private sector have a role to play,” concluded Senator Burt.
Jim Butterfield of Butterfield & Vallis spoke with The Royal Gazette, saying his company tries to keep prices down, but is faced with fixed overheads such as shipping and ports fees, wages, electricity and costs set by overseas retailers. ”I’m naturally concerned for a whole host of reasons,” Mr Butterfield told the newspaper.
“I would hate to see this thing turn into a political football. It’s such an easy thing to just put the spotlight on food prices. We as a company would love someone to sit on this panel. We don’t take our responsibility lightly in supplying Bermuda with food. The worst thing you can get is uneducated decision-makers.”
Senator Burt’s full statement is below:
Madam President, I speak this morning to advise the Senate of the enquiry to be conducted by the Price Control Commission
Senators 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.”
Madam President, Senators will recall that during the budget debate for the Ministry of Finance in March 2011, I made the following statement in this chamber on behalf of the Minister of Finance:
“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.
Madam President, I am pleased to inform senators 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.
Given the uniqueness of this enquiry, the Minister of Finance has charged the Commission with a specific terms-of-reference which includes:
- 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;
- Inviting interest groups, consumers and individual Bermudians, who wish to provide data, statistics and other information, to make submissions to the Commission;
- Inviting input from wholesalers; supermarkets; convenience stores, discount stores, other businesses and services that provide essential goods and services;
- 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.;
- Consulting with the Bermuda Small Business Development Corporation, and employer groups including the Chamber of Commerce, Bermuda Employers Council, etc.;
- Obtaining information from shipping companies and other importers regarding the current cost of shipping, both air and freight;
- 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.
Madam President, at the Government’s town hall meeting last night, an example was given of a retailer who was charging $25 for an item. A friend who was shopping with the consumer told the person, not to by the item as the exact same item was on sale at another store $18. Now, I’m sure the retailer selling the item for $18 was not selling it for a loss, so the question should be, why the retailer selling the item for $25 chose to gouge fellow Bermudians.
Madam President, we must ensure that consumers are protected from unwarranted price increases while suppliers and retailers continue to remain profitable. As a result, it is hoped that this will be a collaborative team effort between Government, suppliers, retailers and consumers.
Food, like energy, is a fixed cost in our economy. If residents can achieve savings in these areas they will have more money to spend in our economy to support our economic recovery.
The government already has zero rates of duty on essential food items such as Milk, wheat, rice, breakfast cereal, and infant formula; a 5% duty rate on meat, fish, fruit and vegetables, cheese, eggs, flours, oils, and fruit juices.
The great recession has challenged all of us, and as a community we must all respond. It is expected that everyone in the community, especially wholesalers and retailers for staple goods such as food, have a role to play.
While consumers are challenged it is only expected that as a community we all share the sacrifice in creating the environment to return our economy to growth. If we are all in this together, then all of us, including those in the private sector have a role to play.
Thank you, Madam President
If Mr Burt is going after food wholesalers I am sure he will make sure we get to see the profits made by BGA on all the products it imports.
Unfortunately, and as has become typical of late, most of the comments indicate that readers have not actually read the terms of reference for the Price Control Commission. They have been given a specific mandate by the Minister of Finance to conduct an inquiry into the prices of essential goods (food). The enquiry will seek input from retailers, wholesalers, unions, shippers and other interested parties. Thus all relevant input will be considered.
It would be interestiig for each person to take the time and think about what items comprise esential foods for Bermuda residents.
Amen
Finally PRICE GOUGING is being INVESTIGATED!!!! I do not feel any empathy for ANY retailer because they ALL do it!! GREED (as well as some other behaviors) has what has lead to the DECLINE of this community
Govt corruption and incompetence is what needs to be investigated. Greed by the govt, for the govt, has led to our decline. Pointing at Bermuda’s food industry is just a distraction. The govt knows the finger deserves to be pointed at them…but they are sick of it.
“The government already has zero rates of duty on essential food items such as Milk, wheat, rice, breakfast cereal, and infant formula”
Interesting. Glad to know these products are duty free. Wonder why these things are marked up just as much as everything else?
Never mind that there’s an embargo on milk and we are stuck with the crap from Dunkleys (which incidentally has gone up nearly 20% in the last two years)
Is the health department reports on Dunkley for pubic review?
@ No kidding,I have no problem with criticism but get your facts correct, milk has not gone up 20% in the last two years and @ Tell me more says, I am happy to share any of our daily tests results on our product or feel free to contact the health dept for their results. I can be reached at Dunkley’s- 292-1310. I look forward to talking to you or anyone else.
I’m not sure why Burt uses a story about retail price gouging to support his argument that the importers should be investigated.
The P.L.P. SHOULD BE INVESTIGATED Senator Burt !!!!!!! what is going to happen is the importers are going to close shop !!! and leave this god forsaken island…
and we will end up with food from third world countries ….like the cheap drugs Zane wants us to swallow !!!! no wonder Bermudians are going to live abroad… this Island SUCKS !!!
really?….Kool-aid anyone?
So lets go after all these nasty people who have made BILLIONS AND BILLIONS of dollars since the recession started!! (not really)
These people you are going after are the same ones whose name is on the bottom of your paychecks, government tax checks, social programs, ect. These are the people who ensure that the milk is fresh and the bread isn’t moldy. But I guess even with that, they are not entitled to make a profit.
Profit in this Bermudian economy seems to be a bad word. Mis-management seems to be fine as the government it quite adept at it. I guess its ok to waste money due to ignorance (PLP wheel COGS) but earning it through hard work and smart investing is just greed. At least we have no shortage of sheep should the grocery market close up.
Thank you Senator Burt,you are working for the people!
Do you guys not understand that this is socialism and 100% against the sole driver of your personal wealth: CAPITALISM.
I knew this government was bad but now I’m scared.
Won’t be saying “working for the people” when ur q’ed up in a bread line.
Be careful. This is just a distraction for all you green KoolAid-aid guzzlers. Within a year or two, these businesses will be swiped right from under the owner’s noses, and some PLP cohort will be bringing in the food, charging you even more than you pay now. I see sugar and bread lines in our futures, just like Cuba and Zimbabwe. This is how it starts. Get the populace all riled up with distractions, but keep mismanaging funds and driving business right out the door. The ASB salvo this week was just a warm up. More to happen.
Profit seems to be a dirty word if monopolies are making it, but not a dirty word when “friends of the PLP” are making it (Emmissions Testing, Dock builders, TCD Builders, BGA).
Cement anyone?
How could BGA be left out of any investigation? That doesn’t make any sense.
I think we know why BGA is left out. This is a victimisation of one or two businesses, and the whole plan has no social or economic value.
Good idea. Force the importers to drop their prices. If they can’t purchase the products more cheaply they simply stop importing them or lay people off. Great idea.
everyone wants to look at the wholesalers & say price gouging, the truth to the matter is the more govt & shipping companys raise, dock fees, the Fcpt ( forgien currency purchase taxes), shipping fees, fuel surcharges. food prices will continue to go up.
This has to be a joke?
Well put Sen Burt, you have stated the matter clearly. Government must address the concerns of the people. Keep pressing on !!!
“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.”
So will Government do their part and do away with the Foreign Currency Purchase Tax and significantly reduce (or do away with the massive) duty costs for fuel?
PLP: Doing less with more (of our tax dollars)
Sadly, it’s those with absolutely no idea of how economics work impressing those with less than no idea
Sticking to the topic of the article, I dont understand who will dispute this. I have seen some disgusting markups between stores in some situations.
I support Government looking into this, if retailers/wholesalers are justified regarding their prices, they should not have anything to worry about and it will give the public a piece of mind that they are not being ripped off.
Having said that, I wonder what the fuel commission has done? The price of oil fluctuates and I dont see it represented at the pumps.
If you’ve seen “disgusting” price discrepancies between retail stores, why don’t you just buy from the cheaper store? Do you really need investigations by civil servants to help you work that out? It’s not exactly brain surgery.
From what I understand the investigations is whether or not retailers are taking advantage of consumers. Point Blank
How many people do you know can spend money and gas and have time to check each and every store to compare?
I really dont understand who would really be against this. If the OBA stated they would do this I would be one of the first to support it, some people need to put politics aside. Jeez.
I support any policy that involves transparency, whether it be Government or Private sector.
So who decides if they are “taking advantage”? There has to be a civil servant to decide what level of profit is acceptable, and what isn’t? Why? As a consumer, I always have the option of buying or not buying. If I think I can get a better deal elsewhere, the expensive store might lose the business, unless I choose to ignore the price and pay it.
Your comment about ‘how many people can check each store’ is lame. There might be reasons why one store has higher prices. More convenient location, fresher produce, better in-store service, better parking facilities, that kind of thing. Why wouldn’t a retailer offering a better shopping experience charge more for it? Its expenses are higher, and the customer has a choice.
People generally know which are the higher-priced stores, and which are lower-priced, and the reasons why. People make their choices.
Having the government place limits on store markeups will lead to –
(a) higher overall prices, because retailers and wholesalers will have to pass along the added admin costs of complying with the government investigations.
(b) less choice, as retailers will stop stocking goods where the government decides the profit should be reduced.
It’s a ridiculous idea, put forward by people who have no experience of actually running a business in the real world.
At least consumers have a choice whether they buy or not. Taxpayers have no choice whether they want to buy into, that is pay for, a $1bn debt created by an incompetent Government.
There are not enough hours in the day as it is for those in retail & wholesale. It is not like the civil service where they spend hours in meetings trying to dream up ways to make work for themselves & their departments in order to justify their very existence.
Management of wholsale & retail should simply boycott any Price Control Commission. “Sorry. Too busy to attend any meetings. Can’t afford time not directly involved with the day to day operation of the business.”
Burt, Perinchief, the PLP as a whole, have no clue of what it takes to successfuly run a business.
The high cost of goods in Bermuda starts with the foreign exchange tax & gets sdded to from there with every little nibble, every little inefficiency. So much of it is created by Government, directly & indirectly.
How much are watermellons in Bermuda this week? Just a few hours ago I saw them at $3 each in a supermarket in Sault Ste Marie, Michigan. Hate to think what they are in Bermuda with Cup Match next week.
First of all, as a civil servant I am insulted by that comment… I work very hard and so do my co-workers in my Department.. Dont generalize the civil service.
Second of all, why does a particular muscle rub cost $30 in one pharmacy and $45 in another for the EXACT same thing???
People complain about transparency in Govt (which I agree with).. well I would like to see some transparency in the retail sector.. I want to see who bad they are robbing us…
Who the heck wouldnt???
how* bad
The Government should commission a report on that compares the price of cement now, compared to – say – 3 years ago.
If cement has gone up in price, that MUST be a result of greedy price gouging by the current owners of the cement business. There can be no other explanation. This affects all Bermudians and MUST be investigated.
Not like they had to move the silos or anything…………………………
LOL
Triangle, I think you’ll find Senator Burt runs a very successful business actually.
And not all Civil Servants are the same, most work very hard. You make a good point though.
If the government feels markups are too high, does that mean he’s going to investigate the allegations of reinvoicing on the Berkeley project?
Furthermore, the Price Commission Act has been around since 1974 (guess which government was in power then).
http://www.bermudalaws.bm/Laws/Consolidated%20Laws/Price%20Commission%20Act%201974.pdf
So really why are people complaining when Government is exercising this Act??
I don’t think the wholesalers are to blame for the high cost of food—-I think the supermarket owners are greedy with their high mark-ups.I check out all the stores and often it is a difference of dollars, not cents. Customers need to watch what is being rung up especially in Whites at Southside as mistakes are made all the time and never in favour of the customer. And it is not the cashiers fault but management as correct prices have not been put in the system. Customers need to shop wisely—-check prices and not buy so much junk food and sodas. I watch young mothers piling large bags of potato chips at over $4 a bag into their carts—this is not sensible shopping.Lindos do not price items so you dont know what you are paying till the cashier puts it through. I guess this is fine if you have so much money you dont really care
Government needs to cut back in its spending. I cant believe the amount of money paid out to consultants and what a disgrace to increase the already huge salary to that 85 year old consultant. And there are families who dont know how they are going to pay their rent or groceries. Shame on you Premier. Time for a change. If you have any intelligence get rid of this Government . Lets not make it a racial election next time but a sensible one.The OBA will not be perfect but I am convinced they will be wiser than our present Government
Why in bermuda can u still buy “homemade or bermuda commercialy made item ” for sale with no ingredient lists or calorific content just a cheap sticker on there with no idea of ingredients or where its made, now this makes sense actually makes this headline issue a joke