Rip off

Boyce claims retailers profiting on the backs of Bajans

Retail stores and supermarkets here are ripping off Barbadians by setting unreasonably high markups using formulas that are unclear to the authorities, Minister of Health John Boyce is suggesting.

Speaking in Parliament Tuesday on a motion moved by the Opposition Barbados Labour Party (BLP) on the turbulence surrounding the National Social Responsibility Levy (NSRL), Boyce demanded that small and large retail stores and supermarkets must show how they determine their markups “because they are now making lots of money on the backs of Barbadians”.

The minister contended that certain business establishments were able to provide goods and services similar to those being offered by the traditional retailers at “significantly lower rates than are being offered in some traditional sectors”, leaving people to wonder about the difference in prices.

“[This] demonstrates the fact that there are certain sectors in this community of Barbados who are making money on the backs of Barbadians and there is no law requiring them to demonstrate to the Ministry of Trade, or any other ministry . . . how their markups are constructed,” he said.

It was for this reason, Boyce stated, that the time had come for “us to make it compulsory for certain sectors to demonstrate how they arrive at their prices.

“It is not a popular view but it is one which helps to guarantee the level of prices that we have to pay in our retail sector.”

Stating that some members of society would benefit from price control, the Government legislator assured Barbadians that the concept was not altogether foreign since “we do it in the drug service.

“Prices are set under a tendering process and once those prices are set, those are the prices the Drug Service pays for the pharmaceuticals that we provide free of charge to Barbadians,” he explained.

While acknowledging that those involved in business ought to make a profit, the minister complained that it was “the kind of prices that we are required to pay in our retail sector and in our supermarkets, in our regular shops” that caused concern.

“Sometimes we are challenged as a Government to provide evidence to the people of Barbados as to how the markups which are put in place in the retail sector are constructed,” Boyce said.

His comments came a day after the business community joined the top trade unions here in leading a 20,000 strong demonstration against the Freundel Stuart administration’s austerity measures, particularly the NSRL – charged on the customs value of imported and locally manufactured goods – which climbed from two per cent to ten per cent, effective July 1.

Prominent businessman Ralph Bizzy Williams has charged that the increase was equivalent to raising the 17.5 per cent Value Added Tax to 27 per cent.

25 Responses to Rip off

  1. d-coolie-man July 26, 2017 at 11:40 pm

    d stores ripping we off not u government John Boyce !!

    Reply
    • Hewers of wood July 27, 2017 at 3:56 am

      Another mujin aka dufus Mr Boyce. You now get up from sleeping. This was going on for many years and who is yet again aiding and causing this????? all of you house negro lot sitting in parliament. You have allowed the lions to devour the lambs for years, tearing them to pieces. You have no price control, no trading standards, just free for all. Many of the people too have no spending sense = continuity on the merchants part. But if you nuts will stop eating and getting your bellies so big and suffering from nigeriti$ then you will be able to see. And by the way you lot taking the pi$$ too.

      Reply
    • Barbados 2.0 July 27, 2017 at 7:02 am

      I wrote the below a few days ago in response to another poster who questioned why prices were rising more than 8%. Forgive the reposting, but it’s relevant to this discussion.

      Let’s say “TVLand”, a fictitious store in Bridgetown wants to import a TV to sell. Their supplier will sell them the TV for US$90 and US$10 to ship it to Barbados.

      If we assume the bank’s exchange rate is 2.04, then the true value of the TV at this point is BBD$204. Then we add the Foreign Exchange fee of 2%. Now the total is $208.80.

      The import duty is assumed at 20%, so total is now $249.70. Then we apply the NSRL of 10%, total is now $274.67, and finally VAT at 17.5% = $322.74. This is the price that it comes out of the port at (not including customs brokers, wire transfer fees or other thing that may have remained constant between the comparisons).

      Let’s also assume that TVLand has a standard markup of 20% on all items on the net VAT amount and VAT is then recalculated after. This would mean the selling price of the US$90 TV would be BBD$387.28.

      If we redo these numbers but without the FXF and NSRL, the total is $345.17. That’s a difference of 12.2%.

      This is also a good time to point out who is really making the money here. Under the current state of affairs with the NSRL and FXF, TVLand makes $54.93 for using their money, time, showroom, staff, electricity and of course risk and profit.

      The Government of Barbados however makes $81.14 (FXF=4.80 Duty=41.76 NSRL= 24.97, VAT(net)=9.61). So basically 60% of of the overall increase in the cost of the TV is due to all the various Government taxes and levies.

      There are a lot of simplifications in this for example, the customs broker might charge more for delivery since fuel prices have gone up, etc., but the premise is the same.

      Reply
      • Janelle July 27, 2017 at 7:08 am

        I totally agree, I was telling a colleague this same thing the other day at the march

        Reply
      • Sasha July 27, 2017 at 7:19 am

        Barbados 2.0. That is the maths but that is not what the minister is saying. He is saying that one 90usd tv is selling for 300 at Tvland but 400 at Tvhouse. Get it?

        The government should have checked the prices before introducing news taxes.

        Can’t tell a man how to sell his things.

        Bajans need to purchase from ppl who are cheapest.

        Reply
        • Barbados 2.0 July 27, 2017 at 7:40 am

          Hi Sasha,

          Indeed, there will always be people selling at different price points, and often with some justification. If you vary the markup amount in the example above, then you will of course end up with different prices. The markup from store to store my vary based on the cost of rent, the cost of staff and indeed the desire of the merchant to make a profit. A business with a high turnover may be able to price less that a business with a low turn over, etc.

          Markup is usually applied to the total cost to the merchant – it’s their money that’s needed to pay the duties and taxes to get the item out of the port, and they are seeking a return on that investment. The puzzle here is that when the duties and taxes increase, a small change in markup from one store to another is actually amplified – the same percentage of the higher number is automatically going to be larger, so the increase in base taxation is actually increasing the spread of prices, even assuming that all markup percentages have remained the same.

          I don’t doubt that there are some merchants who are taking advantage of the situation, but I also think that it is pretty clear why at least some of the variance between selling prices is occurring.

          And again, you’re right, over time this should be self-correcting – we will purchase from the cheapest, and as consumers, we are the ones who vote with our dollars where to buy.

          All the best.

          Reply
  2. d-coolie-man July 26, 2017 at 11:42 pm

    uh wunduh if Abeds ripping we off too..

    Reply
  3. Keera Harding
    Keera Harding July 26, 2017 at 11:44 pm

    Int nothing diff from wa wanna do. Vex caz wanna want all d money fa yaself

    Reply
  4. Sharon Taylor
    Sharon Taylor July 26, 2017 at 11:47 pm

    We were being ripped off for years! Why the concern now? I know where cherish, popular, jordans and to a lesser extent shopsmart and pricesmart is tho….. Cherish supermarket for me boa…. First and foremost…..

    Reply
  5. Anson Sobers
    Anson Sobers July 26, 2017 at 11:52 pm

    Government ripped us off for the past 9 years and nothing to show smdh

    Reply
  6. Sarah Pomeranz Layne
    Sarah Pomeranz Layne July 26, 2017 at 11:52 pm

    Ha.. “must show how they determine their markup ” but they are not allowed to show the NSRL on any invoice. How’s that supposed to work. ??

    Reply
  7. straight talk July 27, 2017 at 12:07 am

    You don’t know the cost that those people had to pay for their goods then 10% at port and 2% on foreign transactions 17.5% vat plus other import fees, and if the goods is source from a local supplier they will pass on the expense. Staff, utilities and other expenditure have to be paid to and in some cases rent you need to see these people bottom line after all thee expenses. You all burden this country with taxes and made life extremely hard for consumers and businesses and now talking rubbish.

    Reply
  8. Lennox hewitt July 27, 2017 at 12:21 am

    Boyce u late u wait 9 years to no we getting rip off csuse feb soon here.

    Reply
  9. Real Bajan July 27, 2017 at 1:50 am

    Good manufactured in Caricom attract no import duty, some are vat free. Businesses can import 40 feet containers from Caricom and only pay Customs $10.00. Some businesses have warehouses in the USA; buy items cheap, send them to their warehouses and sell to themselves here in B’dos. So they cut their own invoices. Check the price of Caricom items in the supermarket! Are they cheap?

    Reply
  10. fedup July 27, 2017 at 6:27 am

    Playing he care but we know he only looking fuh votes. lol. Ah wunda eff Boycie know which uh he fellowmen got $500,000 in cost yuh less..uh mean cost yuh more?

    Reply
  11. Sue Donym July 27, 2017 at 6:29 am

    Will you lead the way, Mr Government? Will you give us tax paying citizens the breakdown to support your supplementals and subsidies? Will we get the nitty gritty on your travel entourages and itineraries so that you can justify the size of delegations and scope of your mission? Will we know for sure that cost overruns did not fund offsite building, furnishing, retrofitting etc.?
    Are you willing to do your own housekeeping?
    – Tired of hypocrisy.

    The merchants will make a change to their pricing policy when ordinary citizens use their voices and spending power to demonstrate their displeasure. That’s a cause that should have massive support. While we grumble among ourselves and buy anyway, they have no reason to think that we’re unhappy.

    Reply
  12. Fred July 27, 2017 at 6:31 am

    I was wondering how long it would take before we got to the Government setting up their election tactic of pretending that it is the private sector ripping us off when the price increases are due to all the tax increases over the years and the fact that we are now effectively paying almost 30% VAT at the check out counters. Stop trying to play us for fools. Also price controls? Look at how great that worked out for Venezuela….

    Reply
  13. Lee July 27, 2017 at 9:09 am

    Boyce is on to something. Retailers don’t go through all the calculations in the TV example above. They take a US dollar wholesale price and multiply it by a factor of FOUR, so US$90.00 becomes Bds$ 360.00 (=90 X 4 ). If it doesn’t sell, they’ll discount by a 10% as a sale price !! Our response to retailers’ mark up practices is to LEAVE IT ON THE SHELF UNTIL THEY LEARN WHAT THE MARKET WILL BEAR !!

    Reply
    • roger headley July 27, 2017 at 9:33 am

      Boyce on to something -them and all the fancy consultants from here, there and everywhere ripping we off too.

      Reply
    • Leroy July 27, 2017 at 9:48 am

      Multiply by 4 is the rough way ya calculate in your head the selling price of an item, the calculations in above post is done by businesses for accuracy.

      Reply
      • Leroy July 27, 2017 at 9:49 am

        Most businesses worth their salt operate on accuracy.

        Reply
  14. Ivana Cardinale July 27, 2017 at 10:52 am

    10% levy? It’s about 20% and more. I felt robbed when I went to buy my groceries last time. When I went to pay, I had to remove some items because my bill had a 20% increase, NOT 10%. So, no more grocery shopping for me as I used to. I will start using other methods, looking for other alternatives as much as I can, but I’ll not work for thieves. We live in a plutocracy unfortunately, not a democracy. Democracy is every system of government exercised by the sovereignty of its people. So, are we really the sovereign? NO

    Reply
  15. Helicopter(8P) July 27, 2017 at 2:45 pm

    There goes the World Reports by the global travelers. Once you have been labeled as a “Rip society” its hard to reestablish from the on set.

    Reply
  16. Ijana July 29, 2017 at 3:25 pm

    I think how it is calculated I incorrectly..an item I use to pay $ 95 for is now $110….from my calculation they did it on the last price and not what was paid for the item….pls help the ppl

    Reply
  17. L July 30, 2017 at 4:49 am

    The government has ripped off the Bsjan people for many many years because they don’t know how to spend wisely – generational corruption on all levels from the port authorities mafia to the bent politicians to the general shoddy services paid for by our high taxes- thus DLP government clearly is floundering and has Vern since 2011 – ever since sir taxalot and deleaderless party got in – all they want is money and who massage- when really what they have gone is criminal and they should all be losing their retirement pension – by their fruitsyea shall know them.

    Reply

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