Home Affairs Minister Walter Roban told MPs today that Consumer Affairs has received a number of complaints of price gouging when it comes to “the hike in prices of certain staples” in Bermuda.
In a Ministerial Statement delivered on the floor of the House this morning, he said: “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.”
The Minister also noted that “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 Roban also noted that 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,” he said.
“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.
“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.
“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,” he added.
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
4. Meats and Fish
5. Oils and Fats
8. Sugar and Confectionary
9. Prepared Foods and Snacks
“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,” said Mr Roban.
“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.