The business community is intensifying efforts to help provide more affordable consumer prices as Barbadians continue to feel the pinch of a high cost of living.
Barbados Chamber of Commerce and Industry (BCCI) president Paul Inniss said yesterday that as corporate Barbados battled its own price pressures, the organisation had submitted its position on a new price compact to Government following discussions dating back to last year.
He noted that members were also “exploring alternative sources of supply, including Latin America and South America”, pointing to “an opportunity for us to bring the cost of, certainly, fruits and vegetables and some foods down by at least 25 per cent”.
In addition, the senior business executive said the BCCI was “engaging Government on importrelated costs and where duties, taxes, charges, or administrative processes may be adding what we may consider to be manageable costs or avoidable costs”.
Inniss was speaking yesterday during a press conference at the BCCI’s headquarters at Braemar Court, Deighton Road, St Michael, where he and other business leaders underscored that businesses, Government, labour, regulators and public agencies all had a part to play in making the cost of living more affordable for Barbadians.
“There has been considerable discussion about the cost of living and everyday prices. Business has a part to play and business has to be part of the conversation, but if the discussion stops at the price on the shelf or the invoice in front of us, I think we would have missed parts of the puzzle to this challenge,” the BCCI president said.
Feeling pressure
“Let us be honest. Households and businesses are both feeling pressure from the cost of imports, energy, financing, labour and logistics, just to name a few.”
One potential avenue to an ease in consumer prices is another price compact.
“We’ve been having discussions . . . since last year with the Minister of Business and Energy around a price compact . . . and expanding the range of the basket of goods and include some other categories as well. So we actually formally submitted our position on that,” Inniss said.
“In addition to the basket of goods that would be subject to that compact, we also made some proposals around how we can actually reduce the costs of goods to the consuming public by way of looking at the formula around tax computation.
“We actually were able to demonstrate that there is a way in which the calculation of duties and so forth on entry to the country can actually result in a direct lower price to the customer.
“We’ve been doing a lot of work with the Ministry of [Foreign] Trade as well to look at how we can actually influence and bring some order to the escalating prices on goods,” he added.
On finding alternative source markets for food and other consumer goods, Inniss said discussions were ongoing, including with Brazil.
“The Chamber is aware that there are markets that can deliver fruits and veg and food to us at reduced . . . source costs. Cheaper source costs doesn’t necessarily mean cheaper food costs because that food needs to move from where it is to our port and then that is another transaction. One of the challenges we have is logistics. How . . . we move those cheaper goods from those alternate source markets,” he explained “A lot of our food goes through North America and then comes down to us. We met with the Brazilian ambassador this week and when they look at what Brazilian products are in Barbados and then how they get here, or how they’ve gotten here, they realise most of it, if not all of it, goes to North America and comes down.
“That’s added significant cost. So if we could find a way to have goods moved from Latin America [and] South America directly to Barbados in an efficient way, I think there’s an opportunity for us to bring the cost of, certainly, fruits and vegetables and some foods down by at least 25 per cent.”
Inniss stressed, however, that “a better source price only helps if the logistics work and if we become more efficient and more responsible in how we manage our resources. Indirect routes and additional handling can erode savings, so we have to really think about both the source and the route”.
He also gave a reminder of the fallout from the conflict in the Middle East, including higher oil prices, stating this “is adding pressure and uncertainty to energy and shipping markets. Barbados cannot control those events but we can work to reduce our exposure and dependence”.
Economist Professor Winston Moore, a member of the BCCI’s economic advisory committee, said a reality Barbados could not ignore was that “we . . . import approximately 75 per cent of all of the business services that we consume locally; if you’re talking about food, then the number goes to maybe 80 [to] 90 per cent”.
“So what that means is that most of the key drivers of prices tend to come from overseas,” he said, noting that the significance of this was reinforced in recent research published by the International Monetary Fund. (SC)
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