Another price warning

Industrial action by Customs officers at the Bridgetown Port, have put a squeeze on some local manufacturers who have been incurring additional business costs as a result of lengthy delays getting goods cleared.

In a Barbados TODAY interview today, Bobbi McKay, executive director of the Barbados Manufacturers Association (BMA), put consumers on notice that the prices of some locally-made products might have to be increased.

The protest over the past month by Customs officers was meant to register dissatisfaction with a Government plan to absorb the Customs Department into the new Barbados Revenue Authority (BRA).

Anxious Custom officers assembled at the NUPW headquarters.
In May, Custom officers assembled at the NUPW headquarters.

The situation was then compounded by the bitter dispute involving the National Union of Public Workers (NUPW) and Barbados Investment and Development Corporation (BIDC) that almost led to a general strike.

Customs officers upped their protest to a go-slow earlier this week in response to an NUPW call for solidarity with the terminated BIDC workers whose reinstatement the union was seeking.

Executive director of the BMA, Bobbi McKay.
Executive director of the BMA, Bobbi McKay.

McKay said while encountering delays clearing goods at the port was not a new experience for manufacturers, the imposition of high storage and demurrage fees was compounding the problem in this particular instance.

“Several people have been disadvantaged. It has taken some of them more than three weeks to get containers,” complained McKay, pointing out to the case of one manufacturer who has incurred thousands of dollars in storage fees.

“If this situation continues, they may not be able to absorb those fees and may have to pass them on to consumers,” the BMA executive director said.

However, noting there was ongoing discussion between importers and the authorities on the issue, McKay said some of the larger companies had already entered an arrangement where they were given between nine to 11 days before they incurred penalties.

Last month, officials of a leading supermarket chain, manufacturing plants and distribution agencies put Barbadians on notice that price increases and layoffs in some sectors were looming as a result of the action by Customs officers.

They also reported racking up hundreds of thousands of dollars in extra storage and demurrage charges.

One Response to Another price warning

  1. Carl Harper July 16, 2015 at 9:39 am

    Bobbi McKay: “If this situation continues, they may not be able to absorb those fees and may have to pass them on to consumers”.

    Ms McKay, that is the nature of business. Companies pass on increasing costs to consumers all the time. Costs have been rising to manufacturers ever since shipping charges went through the roof as a result of rising oil prices two years ago. VAT moving to 17.5 per cent resulted in more expensive goods as well. Didn’t hear you complain, then.

    The consumer will make the ultimate decision and necessary adjustments when prices rise, either by doing without, limiting use or finding suitable substitutes. And your manufactures will have to measure the elasticity of demand for their products and the responsiveness of consumers to any price changes. Buyers and sellers create the market; no one more powerful than the other, except in a monopolistic situation where the supplier may “hold all the aces.”

    The national shutdown has been averted and the quicker the Customs Officers’ impasse is resolved, the faster your members will receive their goods from the Port. Maybe the unions need to step-up the go-slow and threaten an all-out strike for speedy action. Barbadians have a way of picking up the pieces and getting back on track. Hope you will lower prices back to normal, then.

    Even with protectionist tariffs on extra-regional imports, your BMA still lobby government to impose higher duties to further burden Barbadians; the latest was on imported processed meats with two fast food restaurant chains.

    Did nonpayment of BIDC rents by BMA members result in lower prices to Barbadians? Strange, Ms McKay, you have/had nothing to say when many of those tenants contributed to the $11 million BIDC debt from unpaid rents.


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