Chief executive officer of Seprod, Richard Pandohie, said despite an increase in cost for security, wages and insurance for many companies, the price of goods on supermarket shelves can be lowered if consumers start making demands from manufacturers and distributors.
Pandohie, the immediate past president of the Jamaica Manufacturers and Exporters Association (JMEA), noted that while his company has reduced the prices of some items like flour, cooking oil and beverages in recent months, consumers would need to be vigilant to ensure they are benefiting from the reductions when they go shopping.
“Consumers are the ones in many many ways who have the power in their hands, but they don’t recognise it,” said Pandohie, whose career in the productive sector spans approximately 30 years.
“Consumers themselves need to understand the power of their dollar. Jamaica is just fascinating, people complain about prices, yet you will see them go into a gas station with ridiculous prices and five minutes down the road, somebody is selling the same gas at a lower price. I see them just pick up an item off the shelf without even comparing. I am always fascinated by what to me is the consumers not understanding the power of their spend,” he told the Freedom Come Rain newspaper during a recent interview.
Food supply chain disruptions and rising shipping costs during COVID-19 were among the factors that pushed domestic food price upwards. According to inflation data from the Statistical Institute of Jamaica (STATIN), food prices increased on average 13.9 per cent over the 12 months to May 2022.
The World Food Programme noted in its Caribbean COVID-19 Food Security & Livelihoods Impact Survey in February 2022, that an estimated 2.8 million persons in the English-speaking Caribbean are food insecure. The WFP, which is the food-assistance branch of the United Nations, noted that increasing food prices and input costs were contributing to this growing problem, which was causing people to skip meals and in some cases, go to bed hungry.
But Pandohie, a former director of the Jamaica Chamber of Commerce, believes consumers should not remain passive in the face of increasing food cost. Afterall he said, businesses cannot exist without consumers. He is pleased to see based on assessments done so far, that the supermarkets have been lowering their prices as Seprod announce their price reductions publicly. The public announcements have been done using several formats, including tweets from Pandohie’s twitter account, to make the price reductions more transparent.
“Not everything has gone down, but it is important to know what is happening. Everything is in the public domain and I think they [consumers] should ask questions. Ask questions of producers, ask questions of retailers, ask questions of everybody,” he urged.
“We are having conversations also with the traders to say listen guys, ‘we need for you to pass on the prices to consumers, because we need the consumers to be able to buy’. It is not about being Mother Theresa here, part of it is about reducing the disposable income pressure, so they can buy more,” admitted the seasoned businessman who held leadership roles in several companies prior to joining the team at Seprod in 2015.
Pandohie said Seprod, a regional manufacturing and distributing company, has been reducing their prices from the forth quarter of last year. This was the fulfillment of a promise made to consumers who were hit with rising prices during COVID-19 due to increase shipping costs. He has noticed that other manufacturers have been reducing costs. There are still those that have not, but being in the sector, he knows there are many variables to consider. Two of the most recent ones are the drastic increase in the price of sugar and the intense heat wave currently blanketing the globe.
“I don’t know everybody’s challenge, because everybody have different challenges. Security costs have doubled, insurance have doubled, it’s a mixture of component. So I’m not going to sit here and pretend that I know what is happening in somebody else’s business. What I can do is that I can concentrate on my lane and in the place that I have influence. My board is here supporting and we can make decisions,” he said.
Trinidad and Tobago, Dr Keith Rowley lamented the fact that bakeries, roti shops and doubles vendors were not reducing their prices, despite announcements that three major flour producers had cut the cost of flour.
“So a higher flour price was enough to see an instant rise in the price of bread, but a lower flour price is not enough to lower the price of doubles and bread?” he asked, following statements by business owners that the decrease was not enough to allow them to drop the prices of bread, pastries and other delicacies.
As British households struggled under the pressure of high food prices, Prime Minister Rishi Sunak’s office decided to engage with those in the food sector earlier this year to get them to voluntarily get food prices down. A similar move was made by the French government. Supermarkets in March agreed to cut prices on a range of basic items. French Finance Minister, Bruno Le Maire, told Reuters that he would use all the powers at his disposal to ensure that the big industrial companies passed on the decrease in wholesale prices to consumers.
Pandohie does not believe the government should try to control the prices of goods. He thinks competition should drive that process.
“Prices in Jamaica only seems to go one way, up, and it stays up and it keeps going up, but we believe that the consumers, we need to have a different kind of conversation with the consumers where they see that prices can go both directions and the explanation should be transparent and it should be logical,” said the CEO.
Source: Freedom Come Rain
August 15, 2023