Finding deals and sales has become a game for some, but in St Lucia, some supermarkets are being accused of stacking the deck. Over the last few weeks, the prices of goods have been on the increase causing even more worries and anxiety as St Lucians await the implementation of the Valued Added Tax (VAT).
On a normal shopping day, this STAR reporter observed the huge increase in peanut butter at a local supermarket—a price that was in the region of EC$11 for an 18 ounce jar is now EC$17.25 and a 28 ounce jar is now, guess what, a whopping EC$27.29. While some basic items are insignificantly changed, the prices on certain items at the supermarket are at an all-time high.
It is for that reason this reporter sought a comment from the Acting Director of Consumer Affairs, Mary Isaac who confirmed that prices have been climbing the ladder in the last few weeks.
“We are aware that prices are increasing every day in the supermarkets. Though we have price control, we do not have control over all prices; we only have control over a list of items. So there is not much that we can do in the control of these other items,” said Isaac.
She says even the controlled price can be subject to change as the price is dependent on the C.I.F value of the item and the import cost.
“It is unfortunate though, because when you look at the prices of those items in countries where they originate, they are so much cheaper and even when you can see the freight, insurance and transportation, I still do not think there is or can be justification for those kinds of prices that we are seeing on the supermarket shelves in St Lucia,” she said.
While she did not want to confirm what many consumers are saying is an opportunity for supermarkets to maximize their profits on items that may be reduced in pricing after the implementation of VAT, she did say that the possibility does exist.
“From my own observation, prices have been going up every week. Some things go up by two, three and sometimes five dollars in the stores. The price of milk has been jumping by two dollars and three dollars over the past few months.
“I am really sympathizing here with consumers and even the price of bananas has gone up since Tomas. We cannot even really talk of bananas anymore; it has become an expensive item, including ripe bananas. I really do not know where we are going in terms of trying to control cost of goods out there, I really, really do not know.
“In terms of the VAT, I am at a loss as to what the people are trying to do. All I know is that right now, they are maximizing their profits. I believe they have been doing that for a while, I don’t know if it has anything to do with VAT in particular, maybe it might. We would have to monitor the market to determine whether this is actually happening and we have not done that.”
Responding to whether there are any available forms of protection on the quick rising cost of groceries in the supermarket for consumers, Isaac said that currently there are none but she did advise consumers to be very conservative when shopping, because according to her, it will be the only way to safeguard themselves from the alarming hike in the prices at the supermarket.
“You look for things that are in season and consume more of those things over the things that are not. You look at the cost of the things that are imported as opposed to the cost of the local items. For instance, instead of buying an apple, you eat a mango; that would be a lot cheaper because look at the price of apples.”
She also stated that Government would need to pay very close attention to the prices of goods before VAT and post VAT to ensure that consumers pay the right prices on items purchased in supermarkets.
“Government can put a team or a program in place where they can monitor prices prior to VAT and do a post VAT assessment of prices and perhaps, call suppliers together and discuss what would be best for consumers. I don’t know if we can include more goods on the price control list; that could be another route to go because you would control the mark up of the items based on the invoice cost,” said Isaac.
Meanwhile, one shopper attributes the high price of groceries to a lack of competition in St Lucia. John Symphorien says he believes a monopoly in the supermarket business has caused either the closure or merger of smaller independent supermarkets.
“I believe that one company is controlling the cost because they alone running things in St Lucia and that is unfair,” said Symphorien while adding, “The Government should look into that thing just as they broke down Cable & Wireless because VAT is coming and with little jobs around the place, how are we supposed to buy food to eat?”
However, Minister for Commerce, Business Development, Investment and Consumer Affairs, Emma Hippolyte says that may not be the case as prices have been rising over the last few months, years even.
“Normally, we monitor the prices every quarter but as we get closer to the implementation of VAT, we will be monitoring prices every month.
“The Price Control Unit monitors specifically the prices of the basic shopping basket for a family of five and the total price for that shopping basket per week was EC$212.20 in March and as of May it is totaling to EC$220.54,” said Hippolyte.
While some items increase significantly such as garlic, others went down. Hippolyte says in most cases, shipping costs may be the contributing factor to rising prices on the shelves, however, according to the Minister, St Lucia like any other Caribbean island is facing the effects of global crisis.
She says VAT will not be a decider of how prices fluctuate but rather, Hippolyte believes the deciding factors will always be freight, insurance and customs charges on goods entering the country.
“One of the problems we have as a region is shipping—as we dealt with monitoring the price of cement, gas, oil and so on, one of the areas that is a problem with Caricom is the availability of shipping. It is one that is before Caricom to address but St Lucia on its own cannot take care of that problem. It does have an impact on the cost of goods landed here,” she said.
Hippolyte further explained that her Ministry has also advised businesses through the Chamber of Commerce to liquidate their stock prior to VAT so that there can be a smooth transition when VAT is implemented in September.
While some people believe that stores are maximizing their profits before the implementation of VAT, the Minister reassures the public that through Price Control, items on the shelves will be monitored for increase drastic increases that are not in accordance with the recommended price list.