The Chamber of Commerce canvassed its members for questions to ask the political candidates during their popular forums.
The media also asked a wide range of questions and so I don’t think I can break any new ground to the MLAs that will form the new government.
However, I do have a question for voters, comprised of business owners and general consumers. I would like to ask the business owners if they appreciate the difference between free enterprise and rapacious capitalism?
If they don’t and intend to be in business for the long term, they should investigate quickly. Ideally, free enterprise allows businesses to fill consumer needs with an expectation that it will be at a reasonable cost, earning a fair profit.
Should businesses operate with this in mind, everyone would be happy. If not, and the prices of provided products and services are constantly raised without justification, then government may have to introduce price controls to keep the lid on the cost of living.
Price controls is an oxymoron in a free enterprise market but is sometimes made necessary by greedy or monopolistic business enterprises.
I will give three specific examples of approaches to pricing in our present environment of growing consumer demand in a hurricane-ravished economy.
I would like to believe that price gougers are in the minority.
Negative example
The first example is of a bottled water selling company, which, from my observations, is enjoying unprecedented demand for its product. Water consumers have turned to bottled water in droves mainly because drinking water and lots of it, is the current health fad.
This company shortly after the hurricane, even while most were still reeling from the devastation and still struggling from the expense of sheer survival, raised their water price by 20 per cent.
I was so incensed that I asked the young lady at the desk collecting cash at the warehouse where I went to pick-up my five- gallon bottle, the justification for the increase. She had no reason but stammered that the hurricane destroyed their stock of plastic bottles and that they gave a month’s notice of the increase. She then added, ‘It is only a dollar.’
Unfortunate act
This unfortunately is a reflection of the thinking of some business owners.
I saw no new facilities, or staff other than the cash collector, nor did I read about a new patent for processing the water or any huge increase in wages to workers. In fact I had to drive to the warehouse, take back my empty container and place it neatly on a rack, pay cash to the young lady sitting in the air conditioned office before fetching my full container and taking it unaided to my car.
Loss of plastic bottles is no different from the loss of the countless assets and products of other businesses wasted by the hurricane. ‘Only a dollar’ from my perspective, is a straight 20 per cent in the owner’s bank account with minimal incremental cost.
In most developed countries price increases of 2 per cent or more of staple products (water can certainly be regarded in Cayman as staple) would be unheard of. My question to you the consumers is – when are we going to vote against unscrupulous businesses by taking our patronage elsewhere where choices exist?
Positive examples
The next two examples are positive examples of businesses that appear to have put concerns for the plight of citizens (their customers) over the opportunity to reap extraordinary profits.
The first is Foster’s at the Airport where I visited on Saturday and found out that they opened a new Costco-style store in the area formerly used by their wholesale.
This newly renovated and furnished store was stocked with a wide range of large sized and bulk packaged products at significantly reduced unit selling prices.
Entry to this area is not restricted to individuals with purchased memberships. There was no toll or ‘only a dollar’ excuse to recoup the obvious huge capital cost to set up the facility or to pay the wages of the many employees attending to customer needs.
The other positive example is of a company in a much different industry – CI Precast a manufacturer of concrete homes. This company, although demand for its products has risen by leaps and bounds due to the sheetrock experience from the hurricane and consequential increased respect for concrete, has yet to increase its prices existing before the hurricane.
This company rather than raising its prices showed its social conscience by maintaining prices while facing increased cost of material and labour.
Send a message to encourage or warn business to choose the right path when the cost of the goods and services you buy is important to you.
Business owners must be reasonable when setting prices or be prepared for the risk of losing business to local and overseas competitors and possibly the ability to continue fixing their own prices.
Lee Maragh
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