admin's picture

Business group seeks to avoid government price controls

By Fili Sagapolutele PAGO PAGO, American Samoa, (Samoa News, Jan. 5, 2011) – Following a meeting in American Samoa on Monday between the Chamber of Commerce and Governor Togiola Tulafono, the local business organization has agreed to poll local merchants to obtain data on price and availability of basic goods in the territory, said Chamber chairman David Whitby.

The meeting came a week after the Chamber said in a statement that it does not agree with the governor’s plan being reviewed for possible price control, saying it will do more harm than good for American Samoa.

Whitby said yesterday that he, along with Chamber vice Chair Hobbs Lowson, met with the governor on Monday along with a number of his cabinet directors and that the meeting was productive.

At the meeting the "Chamber agreed to poll its wholesale and retail members to obtain historical data on prices and availability for some of the basic items under consideration such as rice, sugar, flour, potatoes, milk, meat and canned goods," said Whitby.

The local Commerce Department will also begin collecting data and tracking current prices on a regular basis, he explained.

"While we are still fleshing out the details on how to communicate the results of both efforts, our goal is to develop a method for communicating this information to the public so that they can make informed choices when making purchases," he said.

Togiola said last month on his radio program that he was working with his staff on ways to help the community with the high cost of living and he was checking into whether or not the government can temporarily impose price controls on certain goods, especially those basic items needed by consumers on a daily basis.

"While price controls appear reasonable on the surface, the reality is that they do more harm than good because a price controlled item becomes unprofitable to re-order, or even to sell from existing inventory," the Chamber said in statement last month.

As an example: the rice importer who is not allowed to take a marginal profit for each bag of rice will quickly turn their investment to a product not subject to the price controls, which provides a better profit, the group says.

David Robinson, co-chair of the Governor’s Economic Advisory Council, believes an investigation into the feasibility of price control should be carried out between the government, the Treasury Department and its Customs and wholesalers and retailers, as the issues involved are more complex than just fixing prices.

Rate this article: 
No votes yet

Add new comment