An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

The pub­lic re­buke of Massy Hold­ings by Bar­ba­dos Prime Min­is­ter Mia Mot­t­ley on Mon­day has ig­nit­ed a wider de­bate over su­per­mar­ket pric­ing, mar­ket con­cen­tra­tion and com­pe­ti­tion across the Caribbean, with the Bar­ba­dos Con­sumer Em­pow­er­ment Net­work (BCEN) warn­ing that the is­sue ex­tends well be­yond a sin­gle re­tail­er.

Speak­ing dur­ing a high-lev­el meet­ing with Caribbean pri­vate sec­tor lead­ers on Mon­day, Prime Min­is­ter Mia Mot­t­ley called on busi­ness­es to ac­cept low­er prof­its on es­sen­tial goods to help ease the cost of liv­ing. She sin­gled out Massy, say­ing there was “no ba­sis” for the com­pa­ny to earn BDS$49 mil­lion in prof­it in Bar­ba­dos while mid­dle fam­i­lies strug­gle to af­ford food. She ar­gued the group could have made a prof­it of BDS$20 mil­lion in­stead and left BDS$29 mil­lion in con­sumers’ pock­ets.

Ex­ec­u­tive chair of BCEN Mau­reen Hold­er said the Prime Min­is­ter’s com­ments sig­nal “that some­thing is fun­da­men­tal­ly wrong with­in the re­tail sec­tor of the re­gion and changes are ur­gent­ly need­ed.” How­ev­er, she cau­tioned against mak­ing Massy the sole fo­cus of the dis­cus­sion.

“BCEN be­lieves the is­sue ex­tends be­yond the con­duct of any sin­gle re­tail­er. It is fun­da­men­tal­ly about mar­ket struc­ture, com­pe­ti­tion and con­sumer wel­fare. There­fore, we be­lieve that dis­cus­sions sur­round­ing Massy Stores should be ap­proached in a bal­anced and ob­jec­tive man­ner,” she said.

Hold­er said as one of the re­gion’s largest re­tail­ers, Massy plays a crit­i­cal role in food se­cu­ri­ty, em­ploy­ment and the dis­tri­b­u­tion of es­sen­tial goods, plac­ing an even greater re­spon­si­bil­i­ty on the com­pa­ny to en­sure con­sumers ben­e­fit from com­pet­i­tive pric­ing, trans­paren­cy and choice.|

“Even with­out the sci­en­tif­ic ev­i­dence or da­ta-based ev­i­dence, as a con­sumer body hear­ing the com­plaints com­ing from cus­tomers about Massy prices and ob­ser­va­tion­al ev­i­dence, BCEN can tell you that con­sumers do not be­lieve they are ben­e­fit­ting from re­duced prices at Massy stores,” she said.

Hold­er said BCEN agrees that food af­ford­abil­i­ty is a le­git­i­mate pub­lic con­cern but ar­gued sev­er­al fac­tors in­flu­ence re­tail prices.
“Food prices are in­flu­enced by sev­er­al fac­tors, in­clud­ing im­port costs, freight, ex­change rates, glob­al com­mod­i­ty prices, tax­es, en­er­gy costs, sup­pli­er pric­ing, and do­mes­tic com­pe­ti­tion,” she re­marked.
She not­ed that Massy Stores rep­re­sents years of merg­ers and ac­qui­si­tions that have strength­ened its mar­ket po­si­tion across sev­er­al Cari­com mem­ber states.
“While merg­ers and ac­qui­si­tions can gen­er­ate ef­fi­cien­cies, im­prove lo­gis­tics, and re­duce op­er­at­ing costs, they al­so have the po­ten­tial to con­cen­trate mar­ket pow­er if not ac­com­pa­nied by ef­fec­tive com­pe­ti­tion pol­i­cy and reg­u­la­to­ry over­sight.”

Hold­er be­lieves Massy has an op­por­tu­ni­ty to lead the re­gion by ex­pand­ing per­ma­nent val­ue-priced ranges on es­sen­tial house­hold items, in­creas­ing pro­mo­tions on sta­ple foods, im­prov­ing price trans­paren­cy, strength­en­ing sup­port for lo­cal farm­ers and man­u­fac­tur­ers and work­ing more close­ly with con­sumer or­gan­i­sa­tions and gov­ern­ments to re­duce food costs.

“As one of the re­gion’s largest re­tail­ers, Massy has the scale to in­tro­duce in­no­v­a­tive af­ford­abil­i­ty ini­tia­tives that could ben­e­fit con­sumers while strength­en­ing cus­tomer loy­al­ty,” she said.

Bar­ba­dos econ­o­mist Je­re­my Stephen said Mot­t­ley’s com­ments should be viewed as a re­quest for Massy and oth­er com­pa­nies to re­strain price in­creas­es rather than con­tin­ue pass­ing high­er costs on to con­sumers.

“Even though when you do look at Massy’s an­nu­al re­ports, and you see places like Bar­ba­dos top­ping the re­sults when it comes to in­te­grat­ed re­tail, and in terms of prof­itabil­i­ty and the rev­enues com­ing from that, then it gives cre­dence to the idea that maybe Bar­ba­dos in par­tic­u­lar punch­es above its weight in terms of con­tri­bu­tion to the Massy Group in that par­tic­u­lar area of their busi­ness,” he said.

Stephen, how­ev­er, said Bar­ba­dos re­mains an ex­pen­sive ju­ris­dic­tion in which to op­er­ate be­cause of cap­i­tal con­trols, rel­a­tive­ly high tax­a­tion and oth­er coun­try-spe­cif­ic risks.
He not­ed that the Bar­ba­dos Gov­ern­ment has re­cent­ly re­duced some im­port-re­lat­ed tax­es by re­mov­ing ship­ping costs from the cal­cu­la­tion of im­port du­ties.

“So that means your ef­fec­tive tax­a­tion drops, which means al­so your VAT, the VAT rate of tax that is passed on to the end con­sumer should fall. So she’s ar­gu­ing that she’s cre­at­ed a base, or her gov­ern­ment has cre­at­ed a base by which Massy could pass on price re­duc­tions,” he high­light­ed.

He added that glob­al fac­tors con­tin­ue to com­pli­cate the pric­ing en­vi­ron­ment.

Guardian Me­dia reached out to the Massy Group for com­ment, but no re­sponse was forth­com­ing up to press time.

“But then there are ex­ter­nal fac­tors that, de­pend­ing on where Massy sources its prod­ucts from, and giv­en the price of oil, you would ex­pect as a shrewd op­er­at­ing busi­ness that they would want to keep prices sta­ble.”