Competition in the distribution sector of Barbados: Good, bad or both?
DISCLAIMER: Insert usual IANA-type (I Am Not A...) disclaimers here as I'm in a rush (going to see Hancock tonight) and I want to post this before I forget.By distribution sector of Barbados, I mean the companies that import the foodstuffs, groceries, etcetera, that we see on the shelves of our major supermarkets as well as the smaller shops.
In some(?) cases, these distribution companies also own and operate the supermarkets (an example of
vertical integration at work here, folks).
After watching a bit of the budget this eve, it seems to me that The Government, as a result of the high cost of living, appears to be receptive and open to the idea of allowing foreign competitors to setup shop in Barbados. In addition, ownership of these outfits is to be kept independent from local entities in an attempt to, perhaps, avoid collusion/cartels(?). The aim here is that by allowing foreign entities into the market, competition will ensue and therefore drive down prices, thereby giving Barbadian consumers a 'break' or an 'ease.'
Now I'm a consumer, and I'm all for a 'break' and an 'ease.' No harm at all, none whatsoever. Or is there? This measure, I think, could very well be a double-edged sword, one that must be wielded carefully (or how about: there are two sides to every coin, or two sides to every issue, or the lesser of two evils? LOL).
Very quickly (as I'm running late for the show at the drive-in):The Good:Foodstuffs et al should be available (in theory), at competitive prices and in a wider variety, to the average Barbadian consumer. I for one am always happy to pay less. After all, I'm a
Barbadian, we like that sort of stuff, but not at the expense of quality ofcourse. ;-)
The Bad:Existing distribution & supermarket entities now faced with stiff competition from overseas competitors (who enjoy
economies of scale), may be forced to compete on price in one way by reducing their costs.
Labour is a cost. Local companies may be forced to lay-off, or reduce staff levels (i.e., Barbadian employees) in order to reduce their costs, which in turn will (hopefully) allow them to offer competitive pricing in line with the overseas players. Alternatives to lay-offs may involve: reducing their profit margins or finding ways to increase the efficiency of their businesses so as to drive down costs.
Another negative aspect of foreign entrants is that if these foreign entities are a hit with the Barbadian public, and they start to make a profit for their overseas owners, where do you think these profits are going ? I'm no expert, but I guess that our Government will probably see a 'little something' in the form of taxes, duties, etcetera, but I think that the bulk of it will be heading overseas, to a parent company somewhere.
I'm sure that there are plenty of arguements and counter-arguements to what I've said, but this is simply a little food (pardon the pun) for thought. Remember, what do I know? IANA... ;-)
In conclusion, if I may offer one slight, insignificant, tiny, suggestion from little ol' me: If you're going to allow these foreign firms to setup shop in Bim, make sure that the majority of all staff hired (even the Management team), are Barbadians.
Labels: Barbados, business, economics, food, life
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Labels: Bush, economy, life, politics, U.S., World, Zimbabwe
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A snippet from the article...
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Labels: Caribbean, Jamaica, life, sports
Article: 'Will Soaring Transport Costs Reverse Globalization?'
A snippet from the article...
"Globalization is reversible. Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today. In fact, in tariff-equivalent terms, the explosion in global transport costs has effectively offset all the trade liberalization efforts of the last three decades. Not only does this suggest a major slowdown in the growth of world trade, but also a fundamental realignment in trade patterns."
Sources:Will Soaring Transport Costs Reverse Globalization? (CIBC World Markets)
Labels: business, China, economics, life, news, oil, U.S., World
Article: 'The Coming Energy Wars'
Snippets from the
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""Indeed, there's concern that as higher oil prices force many Asian economies to reduce or even cut their generous fuel subsidies, growth will slow sharply, and there could be social unrest as the world's poorest become more desperate. The political ramifications of this (which already include moves away from free trade), combined with the ever-rising costs of doing business as usual, could force a retrenchment from globalization. "It's a harbinger of the reversal of globalization," says Jeff Rubin, chief economist for CIBC World Markets. "At $200 a barrel, you'll see transport costs rise so much that they will effectively reverse the trade liberalization of the last 30 years." He predicts that world trade will realign itself regionally, so that while Japan may continue to ship in goods from China, the United States will increasingly import from Latin America. "If you look at the period from 1973 to 1979 [when oil spiked] you'll find the same thing happened," he notes. "The share of imports to the U.S. from Latin America and the Caribbean rose by 6 percentage points. That was all about freight costs."""This spring, America hit a historic point. With average gas prices per gallon edging toward $4, America's notoriously profligate ways started to change fast. Americans are driving less, using mass transit more, buying fewer gas guzzlers, indeed shopping less wantonly in general, and lowering their previously unshakable confidence as consumers. Suddenly, Americans are acting differently; if not exactly like Swedes, then not quite like themselves, either. It's a shift that could change the world.
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Labels: China, India, life, money, oil, World
