High energy, customs charges crippling small retailers
SMALL retailers, gearing for this Friday’s premier Fashion’s Night Out (FNO), yesterday lamented the high cost of doing business locally, led by onerous energy charges from the Jamaica Public Service Company (JPS) and prohibitive customs duties.
Twelve entrepreneurs, speaking at the Observer’s Monday Exchange meeting at the newspaper’s Beechwood Avenue headquarters in Kingston, defended their importance to the economy and contended that they had to survive despite trying circumstances.
Questioned about the problems facing the sector, the small business owners listed customs charges, obtaining bank loans and JPS’s high light bills as their most pressing problems.
Cezar Cunningham, operator of Base Kingston boutique in Manor Park estimated his energy cost as high as 30 per cent of monthly sales.
“I have a very small footprint and when I see my JPS bill it is ridiculous,” Cunningham told reporters and editors.
Highlighting the JPS energy bill dilemma, proprietor of Permanent Cosmetics, Racquel Jenkins Moss-Solomon revealed that her energy bill moved from $4,500 in January to approximately $30,000 last month.
According to Jenkins Moss-Solomon, her business uses primarily lights and she strongly contended that energy usage at her shop has not changed since the start of the year.
“They [JPS] sent inspectors because they said my bill was too low,” Jenkins Moss-Solomon shared.
“They do the billing based on where we are,” said Jenkins Moss-Solomon, whose company is located at Eden Gardens on Lady Musgrave Road.
Private sector members, large and small, have repeatedly argued that JPS energy charge is the single most debilitating factor in doing business in the island.
Yesterday the entrepreneurs, primarily owners of small boutiques, also blamed restrictive customs duties, and difficulties receiving loans as other factors working against their operations.
“We are players in a system that is stacked against us,” commented Cunningham.
“My [other] challenge is the taxes and the duties that we are paying,” he said, adding that his customers could purchase similar goods overseas at much lower prices.
The members of the micro business sector said that taxes and duties could be as high as 70 per cent on some products they import.
“We are the only country that pays so much in commercial duties,” charged Consuelo Blake of Trendi Editions.
Obtaining bank loans also prove problematic for the micro-business traders.
Janelle Pantry, managing director of Spaces, a furniture outlet in Kingston’s Winchester Business Centre, told the Observer it has not been a pleasant experience seeking loans to supplement operations in her small company.
According to Pantry, banks requesting collateral have refused to accept inventory, opting instead for real property, or a motor vehicle to finance the expansion of her furniture outlet.
“As much as the financial institutions promote small businesses, it is specific to special industries,” Pantry contended, adding that agriculture, for example, was now getting special attention with lower interest rates.
Pantry said even when she applied for loans through a special Women in Business pogramme she could not accept the terms from the financial institution and has instead placed expansion of her business on the back burner.
Quoting of rental rates in US dollars was another peeve of the small retailers who questioned the reason behind such a move by landlords.
“Based on that we always have to make provision for movement in the US dollar,” argued Consuelo Blake of Trendi Editions.
Blake said that the current appreciation of the Jamaican dollar is now placing retailers at a disadvantage as landlords are now asking for a re-negotiation of lease agreements.