Cabinet to discuss chicken prices today

As consumers brace for another increase in chicken prices to $4.99 a pound, Legal Affairs Minister Danny Montano takes the fight with certain producers over the quantum of the increase to the Cabinet table today. He said he was taking a note to Cabinet on the issue, but declined to reveal the details. Montano said  the main producer Nutramix (which controls over 40 per cent of the market) realised that Government’s hands were somewhat tied on this occasion because of the avian flu sweeping the United States.

Last September, when producers began to increase prices, Government used the 88 per cent import surcharge (which protects the local industry from being overrun by cheaper  foreign imports) to force the prices down at between $3.50 and $3.99 a pound. Without the surcharge local producers would have been unable to compete with imported chicken. But with the avian flu there is no such threat that the local market could be flooded with cheaper foreign chicken. “So Nutrimix which has attempted to play hard ball in the past, now feels that the price (of $5) is secure,” Montano noted.

He admitted that Government currently had no legal mechanism to force prices down. But, he pointed out, the fair trading bill, which addresses issues such as predatory prices and monopolies, was at present before a Cabinet Sub-committee, and could be brought on the parliamentary agenda. “Until then I can only try and persuade producers to keep prices low,” Montano said. He stressed however that not all producers were “singing the same tune.” And he was “very encouraged” by reports that pluckshops were turning back Nutrimix chickens, refusing to pay the increase. He said one producer was holding the price (at $3.99) but the pluckshops are bombarding this producer and he would soon exhaust his supplies. Montano said one of the options which government may have to consider is to facilitate the chicken growers — who claim that they can produce chicken at $3 a pound — so that they could form themselves into a co-operative and sell chicken directly.

Montano told Newsday some weeks ago he met the four major producers who have been agitating for an increase. He said he wanted to see some justification for the increase and therefore wanted to examine their financial statements over the last five years. He said only one producer submitted the documents, but in the meantime, Nutrimix announced a price increase to $4.99. He said the reluctance to provide the requested information had made him “extremely suspicious of what those fellas are doing (with the price).”