COST U MORE
Changes to basket of good lead to price hike
Shopping at retail outlet Cost U Less is about to cost Barbadians more come September 1, as prices are about to rise on hundreds of items.
The store, which seemed to be the first out of the blocks with the notice on pending price increases as a result of the announcement in the June 15 Budget of the adjustment to the basket of goods, said the price rises were in keeping with Government regulations.
Price increases on the items exempt from the so-called basket of goods are expected to take effect at supermarkets and shops across the island as of September 1.
Notices placed in the snack isle of the bulk retailer at Welches Walk, St Thomas store said that in compliance with Government regulations, “beginning September 1st, 2015, new Value Added Tax of 17.5 per cent will be added to hundreds of items”.
When contacted store manager Joe Lachausse told Barbados TODAY the move was in response to the change of items in the basket of goods.
“That one is upcoming to the changes to the basket they are allowing . . . that will include hundreds of items,” Lachausse said.
In his June 15 Financial Statement and Budgetary Proposals Minister of Finance Chris Sinckler announced changes to the basket of goods effective September 1, 2015. The new basket contains over 150 items compared to the more than 409 in the previous list, which means that over 200 items would now attract the 17.5 per cent VAT.
Sinckler said the move should result in Government earning an additional $20 million in revenue during the fiscal year.
Lachausse explained that the list was as lengthy as it was because of the classification of some products “which means it may say one thing but it applies to multiple different [items]”.
Asked if he anticipated that the increased prices would affect shopping at the warehouse club-type shopping facility, the store manager said it was “to be determined”.
In the Budget Sinckler also announced a 10 per cent excise tax would applied to locally produced and imported sweetened beverages such as carbonated soft drinks, juice drinks, sports drinks and fruit juices.
That took effect on August 1, 2015 and was levied on the value of the product before the VAT was applied. Sinckler announced that the measure, which was expected to generate in excess of $10 million in revenue this fiscal year, would be revised in two years to determine how it affected the behaviours of producers, importers and consumers, and whether it should be extended or intensified.
In relation to that tax, which was imposed primarily to encourage Barbadians to consume less sugar, Lachausse told Barbados TODAY while the change took effect on August 1, it was too early to determine if it was affecting the buying habits of consumers.
However, he said, “My personal feeling is if you drink Coca Cola [for example], you will continue to drink Coca Cola. I know it is designed to shift people away from unhealthy drinks and I would like to see that, but I think when people have a preference they typically stay with their preference.”
A revised list of items from the Cost U Less store on the locally produced and imported sweetened beverages showed price increases ranging from $0.10 to $5.
When contacted on the matter, owner of the popular A1 Supermarkets Andrew Bynoe, who last month described Government’s decision to remove some items from the so-called basket of basic goods as a backward step, declined comment.