By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Chamber of Commerce’s chief executive yesterday said it was “a tragedy” if government regulations forced business closures, as he again called for “market forces to prevail” over price controls.

Edison Sumner told Tribune Business that the impending closure of Paul W. Albury & Sons, the Champion tomato paste manufacturer, after a more than 60-year history “speaks to the challenges we’re facing across the country with the economy”.

The company, in a letter to consumers, said the costs it would incur to remain in business were just too great, after sustaining significant losses over the past 18 months.

It blamed this on a combination of price controls, which allowed it just a 12 per cent mark-up on 70 per cent of its products, plus increased taxes and the weak economy.

With revenues constrained, and costs rising, Paul W. Albury & Sons is set to close on August, joining other historic brands, such as City Markets and John S George, in ceasing trading over the past few years.

Promising that he would “reach out” to Paul W. Albury & Sons’ principals to obtain a better understanding of the issues forcing the business’s closure, Mr Sumner said the Chamber “grieved” every time this happened to a Bahamian company.

This, he added, was especially the case if a firm was forced to cease trading as a result of “avoidable” issues, such as government regulations or policies.

“It would be a tragedy, and very sad, to see any business close because of any conditions in the marketplace, particularly those businesses that are well-established and have been serving the Bahamian community for a very long time,” Mr Sumner told Tribune Business.

“When you have a business closing, it becomes grievous to the Chamber. We are grieved by the fact that businesses are having to close, particularly when it comes to issues that are addressable or can be avoided through further collaboration with the regulatory agencies and, with a little extra effort put in, fix the economy and cause companies to thrive in a sound and progressive environment.”

Mr Sumner said the Chamber was keenly aware of the challenges faced by companies such as Paul W. Albury & Sons, adding that it was “working every single day to address the myriad issues impacting the private sector”.

One such concern is price controls, which many businesses believe are an unnecessary Government intervention that distorts the market, forcing companies to sell numerous ‘breadbasket’ products and other items ‘below cost’ in the name of consumer protection.

They instead argue that there is sufficient competition within most sectors of the Bahamian economy to keep prices keen and prevent ‘gouging’, while many consumers are often far more sophisticated than given credit for.

Echoing these themes yesterday, Mr Sumner said: “While we understand that price controls are intended as a means of consumer protection, we would prefer to see market forces prevail, so that businesses are not boxed in on what they can price their goods for.

“All businesses should be able to sustain and hold their margins at reasonable levels where it is profitable to do business, and they can be sure customers and clients are able to afford their goods and services.

“It can’t get to the point of imposing what they can and can’t charge, and that hampers the goals of the private sector and their ability to generate profits to stay in business.”

Renewing previous calls for greater collaboration between the Chamber, the Consumer Protection Agency and Price Control, Mr Sumner added: “We feel that if we move more to a free market economy where goods are priced on supply and demand, competition, availability and economic conditions, we can create a more competitive environment where goods and services are priced at a competitive level for the marketplace.”

Pointing out that all Bahamas-based companies invested heavily to serve their clients, Mr Sumner said there were only losers if price caps “hamper their ability to grow”.

Apart from the loss of jobs and associated disposable income, business closures also led to reduced economic activity and lower tax revenues for the Government.

“It’s incumbent on us to ensure businesses in this country, especially small and medium-sized enterprises (SMEs), are able to feel - and have confidence - their businesses can grow, and are not going to be hampered by any level of bureaucracy that causes them to go without profitability,” Mr Sumner told Tribune Business.

“Deficits cause them to close their business... When we hear businesses are closing, we become very concerned and want to find out why, and what can cause them to reconsider. The Chamber knows these challenges, and is working on them every day.”