Consumer Research Unit

The Research Unit is a recent initiative by the Consumer Affairs Department in order to improve the quality of service and representation to its constituents. Research is a fundamental element for any institution; therefore, the Research Unit scans the local, regional and international environment for problems and opportunities which impact consumer welfare. Research is conducted on pertinent consumer issues which have an effect on consumer welfare. The research findings inform consumers and businesses and guide the Department in the formulation of consumer policy and legislation.

 In 2010, the Research Unit conducted a number of surveys in the following areas:

• Factors which influence the retail price of Local Pork.
• Concerns of Retailers of Liquefied Propane Gas (LPG) in Saint Lucia. This survey was conducted to highlight and make available to the policy makers the issues affecting the retailers of LPG.
• Consumers' perception of the Public Transportation System in Saint Lucia.

The report of this survey has been made available to the National Council of Public Transportation (NCOPT) and the Ministry of Communications and works.

• Minibus Drivers' perception of the Public Transportation System in Saint Lucia.

The report on this survey has been completed and the Department is in the process of making it public.

The objective of the survey on the retail price of local pork was to establish and ascertain to what extent overheads impact the retail price of that commodity. This information will assist policy makers to determine whether the price of local pork should be regulated.

It is important to note that the Ministry of Agriculture, Fisheries and Lands implemented a domestic policy to ensure the survival of the local pork industry. This policy requires an importer's total supply of pork must consist of forty percent (40%) of local pork for purchases.

Storage costs seem to be one of the major costs influencing the retail price.  Perhaps the size of the entity and its operations have an impact on storage cost. This is depicted in pie chart no.1 below.

 

The survey disclosed that in Castries the price ranged from EC $5.00 - $7.50 with $7.50 being the most prevalent price. In the area of Gros-Islet the prices were EC $5.00, $6.00 and $6.50. In Soufriere the range found was EC$6.99 - $8.99 with the latter being the most popular. In Vieux Fort there was a common price of EC $8.99.

The above shows that the range of prices for local pork is cheaper in Castries and Gros-Islet than that in Vieux Fort and Soufriere.  One possible reason is that there are more wholesale outlets in Castries and Gros-Islet than Vieux Fort and Soufriere. The wholesale outlets prices are cheaper than retail outlets.

The findings, also revealed that the purchase price of local pork is six dollars (EC $6.00) per pound. This implies that little profit is gained and in some cases some outlets experience a loss.  Further, it was concluded that a loss is realized because the demand for local pork is low as compared to the imported pork.  Consequently the price has to be reduced to increase demand. 

At this juncture, it is essential to note that the retail price of imported pork was quoted from two meat outlets; one in Castries and the other in Vieux Fort.  The prices were recorded at $7.23 per pound, and $10.99 per pound respectively (pork tenderloins).  This suggests that the gap between the price of imported pork and that of local pork is not very wide. 

"It is also important to mention that feeds used by the farmers are expensive."  For example, the price quoted from a retailer in Vieux fort is EC $45.00 per fifty pound bag.  This cost influences the retail price which currently prevails on the market. In fact the pig feed is the most expensive and critical input in the local pork production and a hindrance in the local industry. The price of the feed has not only caused marginal profits to be realized by farmers but also wholesalers and retailers of pork.

Comments and concerns about the local pork industry were as follows: thirty percent (30%) had no comments; fifteen percent (15%) stated that they are satisfied with the local industry and with the inception of the Co-operative, the supply of pork has been consistent, fourteen percent (14%) has also indicated that the cost price of local pork is too high. Other comments worth mentioning are (1) the quality of pork should be standardized and (2) wholesalers and or retailers should have the right to purchase choice of cuts as oppose to the whole carcass. 

Recommendation

The main source of concern seems to be the high price of feed, which has caused a multiplier effect in the industry. Therefore:

• 1) Measures should be put in place to assist the farmers source cheaper feeds
• 2) Procedures should be developed to assist farmers to cut down on the cost of production.
• 3) The relevant authority can subsidize the price of the feed.

 

Conclusion

This survey was conducted to provide information to the Consumer Affairs Department and other relevant authorities in order to facilitate and assist all stakeholders, specifically the local pork farmers. The results of this survey have shown that while the Saint Lucia Pig Farmers Co-operative Society Ltd. has played a role in assisting the farmers in creating a market, overheads and in particular the high cost of feed continue to plague the industry. The effect of this cost has not only affected the farmers but also all parties involved in the industry.

Currently, the gap between the prices of local and imported pork are small and attempts to increase the price of local pork to cushion the effect of the high cost of feed may cause consumers to gravitate towards the purchase of imported pork and thus create an unfavorable effect on the local industry. However, if the price of local pork is regulated through the institution of price control, this measure will be beneficial to the industry if it causes a reduction in the price of local pork.

It is worth mentioning that pork was price controlled by a fixed price, under Statutory Instrument (SI) 1984 No. 43. However, in 1999 pork among other price controlled commodities was deleted from the price controlled list by way of Cabinet Conclusion no 27 of 1999.  Pork was priced as follows:

• § Gilts, barrows and other Pigs per lb - maximum retail price $2.50
• § Liver per lb - maximum retail price $2.00
• § Other parts per lb - maximum retail price $1.50
• § Pigs on the hoof per lb - maximum ex factory (depot, warehouse, delivery vehicles or farm price) $0.96

While the retail price of pork was controlled, the wholesale and the distribution prices were not. This created a loophole in the SI in that some farmers sold a pound of carcass more expensive than the retail price. This caused frequent complaints from retailers of the product. This therefore shows that if pork is to be controlled, the distribution as well as the wholesale and retail price should be controlled as well.

 

Source:

The Research Unit of the Consumer Affairs Department

Ministry of Commerce, Industry and Consumer Affairs

Heraldine Rock Building

Waterfront - Castries

Tel: 468 4227/32 452 3141

Services

 Activities undertaken to achieve research objectives include:

• Undertake bread basket surveys to ascertain price movements of basic food items.
• Establish the accuracy and approval of price calculation sheets.
• Monitoring commercial outlets for compliance regarding product recalls.
• Initiating island-wide surveys using various tools such as questionnaires, interviews, etc in order to identify problems affecting consumers with a view to providing solutions.
• Collaboration with other consumer protection agencies.