More price reductions should be coming, says JMEA head
FABIAN Brown, businessman and chief executive officer (CEO) of Value Added Services, has commended Jamaica Broilers for reducing the price of chicken by $12.50 per kilo and has encouraged other providers of products and services to follow its lead.
Value Added Services is a business management consultancy dedicated to the development and growth of local, regional and international organisations, communities and individuals.
Brown expressed hope that all sectors of business will seek to implement measures that show that they care about the public enough to help them cushion the blow of inflation.
“It is critical for leaders to know how and when to respond to crises, and in what capacity. The Jamaica Broilers Group has demonstrated care and compassion for the consumer,” Brown said.
He added that while the primary focus of businesses is to generate profits, major players who can mitigate the effects of inflation should do so.
“I hope that this step by Jamaica Broilers will inspire and encourage other companies to implement measures that will aid consumers where possible, and that this reduction in chicken prices will further cascade to retailers and restaurateurs,” Brown said.
President of the Jamaica Manufacturers and Exporters Association (JMEA), John Mahfood indicated on Friday that while other industries, particularly manufacturing, may very well be able to apply price reduction at some point this year, it won’t be as easy. Mahfood pointed out that the cost of chicken feed has dropped, which is the main reason for a price cut, and commended Jamaica Broilers for the move.
He appealed to supermarkets to adjust their chicken prices to reflect the reduction.
“The cost of chicken feed has to do with the cost of corn and other things that go into the cost of feed. Now that the price of those items have come down, it immediately impacts on the price of chicken meat because it really takes about six weeks to raise a chicken. The people who grow the chicken are going to see a big reduction in cost,” reasoned Manfood.
“The lead that Jamaica Broilers has made is a very good one. Jamaica Broilers is a very powerful company and when they publicise the reduction in the price of chicken meat to the supermarkets then the customers and consumers are expecting to see the chicken meat prices go down. That is not the same for all other manufacturers.
“A manufacturer who is buying other products, whatever those products are, that go into the manufacturing of the food item or the manufacturing of a juice or something, may not be seeing immediate price reduction in their raw material. I feel that those prices will start to come down in the future but not as immediate as the price of corn that goes into the chicken feed,” added Mahfood
He expressed confidence that other sectors will reduce the cost of their products, especially since the Jamaican dollar has been strengthening.
“Eventually as the year goes on and transportation costs and the cost of raw materials come down, I would expect that companies in the manufacturing sector would be in a position to start reducing their prices. One good thing that has happened is that the Jamaican dollar has strengthened. At one time this year,it was $157, now it is just over $151 — that also has an effect of the price of imported items,” said Mahfood.
He added: “In the construction field, products like steel, plywood, ply board and lumber, those things ran up a lot last year and early this year but have now come down. This means that the price of housing, which was increasing at a rapid rate, should also stabilise — and we shouldn’t be seeing such an increase in [the price of] houses because of a fall in these products being traded on the world market.
“What we will have to do as manufacturers is, once we are in a position to reduce our price then we have to make sure the supermarkets reduce their prices. What Jamaica Broilers did was to publicise the reduction. When the time comes, other big manufacturers should do the same so that the public can look out for the benefits to come from price reduction.”