A government minister is calling for a critical analysis to determine why consumers carry the burden of price increases, but don’t benefit from reductions.
Minister of Agriculture and Food Security, Indar Weir, expressed this concern as he responded to questions from the media about projected increases in feed prices by as much as 26 per cent.
Speaking after the launch of the Pesticides Container Management Scheme at the River Plantation on Wednesday, the Minister said he “strongly” supported competition in the market as the presence of monopolies in small markets could result in consumers losing their sovereignty.
“I have seen what competition can do. And really and truly, it comes down to how we will get other entrants into the market, and what role they will play in making sure that the consumer gets the best value for the investment, and equally that the businesses involved also get the best return on investment,” Mr. Weir outlined.
He explained that the lack of competition would result in a situation, which he has observed across the board, where “the flooring” is raised during increases, and remains the same even when prices are reduced.
“Each and every time it has changed, it is to the disadvantage of the consumer, and at the time when the inputs come down, you will find that prices don’t drop proportionately.
“And therefore, my concern is that we need to zoom in on this, and look to see how we can do the critical analysis to determine what is happening, why consumers continue to have to carry the increased costs and don’t benefit from the reductions in the same way that the provider, or the business or the investor would benefit from the increase,” the Minister underscored.
However, he noted that Pinnacle Feeds, the lone manufacturer of feed in Barbados, was being impacted by the rising price of freight and grains. This, he added, would inevitably impact their bottom line, which they would need to recoup.
But, he said, Government’s concern was surrounding the level of the increase.
“Initially, we started as a 10 per cent [rise] and the Government of Barbados committed to putting in a $2 million support to cover a three-month period. This was May, June, and July.
“And at the end or before we could reach the end of July, before going back to negotiations, we saw that there was information in the press suggesting that the price would go up by as high as 26 per cent,” Mr. Weir lamented.
He added that he met with the new owners of Pinnacle and an agreement was reached to hold off until August 6.
The Minister said on August 6 he informed Pinnacle’s management that options were being considered, which would be discussed at Wednesday’s meeting, before a determination is made on the projected 26 per cent increase.