RETAILERS and restaurateurs are attempting to assure Jamaicans that the chicken price reduction announced by Jamaica Broilers will be passed on to consumers, despite a fear they may not benefit.
Global food prices are falling but based on past experiences, Jamaicans do not believe prices will go down as quickly as they were hiked, and are anxiously waiting to hear when those price reductions will start to reflect on their grocery bills.
Already Jamaica Broilers has given the assurance that lower prices are here.
Effective today, August 18, 2022 the Best Dressed Chicken, a division of Jamaica Broilers Group Limited, will reduce the price of its Chicken Grade-A whole bird and mixed parts by $12.50 per kilo.
In a full page advertisement in Wednesday’s edition of the Jamaica Observer, the company said the reduction comes as a result of improvements in the global market conditions, including increased stability in the grain market, stabilisation of the foreign exchange rate and reductions in containerised shipping costs.
“It is a very good economic signal that we are able to implement a price reduction at this time. As always, we will continue to review our prices as conditions evolve,” said Christopher Levy, Group President and CEO, Jamaica Broilers Group.
Still, consumers are sceptical that the price reduction will actually be passed on to them.
In light of this concern, consumers are being encouraged to take advantage of all the tools available to them, especially those provided by the Consumer Affairs Commission (CAC).
In an interview with the Observer, director of research at the CAC, Racquel White stressed that there’s no penalty for not passing on price reductions to consumers. However, she advised that retailers operate in a free market which means that consumers have the option to shop around and get the best prices.
She explained that consumers can use the information published by the CAC to inform their spending patterns.
“They can look out for our publication in the consumer alert which is likely to come out the second week of September, they can find the most current grocery prices on our CAC app also,” White added.
But she admitted that the CAC’s surveys are not all encompassing, pointing out that the CAC does not collect data on restaurant prices, for example.
In a statement to the Observer, marketing director at Restaurants Of Jamaica (ROJ), Tina Matalon said “ROJ has been monitoring the movement in global commodities and we are in diologue with our suppliers as to when we should expect to see the positive impacts of these movements. We note with interest the approximate 20 per cent reduction in corn prices and the approximate 60 per cent reduction in shipping costs since the April/May high which make up a significant portion of the costs of poultry in Jamaica. We had hoped that the falling global commodity pricing would positively affect and impact our suppliers, as our pricing is directly tied to supplier movements so, with this reduction, we will be able to reduce prices at the restaurant level, to the products that were reduced by the supplier. “
ROJ is the operator of KFC and Pizza Hut in the island.
In the meantime, a statement from the Ministry of Agriculture and Fisheries quoted portfolio minister, Pearnel Charles Jr, as saying, “We welcome the price cut on the specified chicken products at this crucial time when consumers are in need of relief from the rising food costs. The ministry will continue to have dialogue with our stakeholders and encourage further reductions as the global market stabilises. We look forward to the domino effect that this reduction will have on other products and ultimately to the benefit of consumers. The ministry continues to work with our partners as we move to increase food security for our Jamaican people under the banner of our Grow Smart Eat Smart campaign.”
Managing director at Kingston Jerk, Gavin Valentine, noted that passing on price reductions to consumers is not always black and white, explaining there are various nuances and other variables which must be considered.
“What we’ve found in the Jamaican market is that whenever it falls globally it doesn’t always pass through to the Jamaican market, we’re talking about oil, corn etc. The JB announcement regarding chicken prices falling is great. I believe that will benefit mostly retailers. However, being a restaurant-based business, we have not necessarily done an increase every time there was an increase on chicken, some of it we just had to absorb,” Valentine stated.
Chicken prices have gone up more than four times in the last year and Valentine claims Kingston Jerk has only increased prices about two times over the past two years.
He did not comment on the level of increase on those occasions but stressed that it would not have been in his best interest to hike prices frequently.
Further, CEO of Island Grill, Thalia Lyn, said, “We got a letter from Best Dressed to say they are going to lower their chicken prices to us by two per cent so we’re looking to see how we can adjust our prices as well. It is welcomed news because I can’t even count the amount of price increases we’ve had.”
At the time of the interview, Lyn told the Observer she had not heard from the CB Group on whether they will be taking a similar approach, but she said “we’re holding our breath but if we don’t hear from them we’ll certainly call because we take from both suppliers and customers are waiting but we can’t really adjust the prices until both suppliers do it.”
Calls made by the Observer to the CB Group were unanswered.