The Inspectorate of TEATT has taken note of several complaints made regarding the sudden increase in the price of eggs and other consumables on the local market. Specifically, claims are being made of “price gouging” by some local supermarkets and wholesalers.
Price gouging occurs when a seller increases the prices of goods, services or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or supply shock.
As a result of the complaints, the Inspectorate launched an investigation to determine whether there is a relationship between the movements in the retail price of eggs and other food commodities versus the wholesale prices being offered by suppliers. Based on invoices of U.S.-based suppliers received from several major food importers (on the wholesale level) and supermarkets (on the retail level), the following was determined:
Over the period March 11th to March 30th 2020, the price of eggs and the listed consumables have changed considerably. The change (increase) in wholesale price is displayed in the table below.
Additionally, the chart below shows the differences in real numbers across the major wholesalers/ importers on the island.
Based on the aforementioned, it has been determined that there is no price gouging happening on the local market, but rather that the increase in prices locally is attributed to the increase in prices from source markets abroad.
Additionally, based on research conducted, we have also determined that the demand for and the consequent prices of these food commodities are also being driven by the online promotion of these foods as cures or recommended treatments for Coronavirus (COVID-19). Foods like ginger, lime, brown sugar are all being promoted online and via social media as cures to the Coronavirus (COVID-19) or being able to address its symptoms.
The Inspectorate recommends that the public follow the recommendations and guidelines of WHO, CDC and local public health officials only.
According to Quartz, a website focused on offering different perspectives on the global economy, “panic buying at grocery stores has made eggs and orange juice the best performing assets this year. A handful of agricultural commodities are in high demand. A dozen large white eggs has jumped to about $2.93, up from around $0.84 at the beginning of the year [in the U.S.], according to FactSet, citing the USDA data.”
Returning to the original definition of price gouging. It has been stated emphatically by local government officials that there is no shortage of food supply on the island and therefore the motive for price gouging currently does not exist i.e. no disruption or shock in food supply. However, international developments in the price of food driven by fears surrounding Coronavirus (COVID-19) can and will continue to impact the price of food imports to the island.
The Inspectorate encourages the general public to consult the maximum price list for COVID-19 products found on the government’s website when shopping and before filing complaints. Secondly, please consult official sources for information on COVID-19 as consumer behavior individually and collectively vis-à-vis panic buying can drive up the prices you pay for food.