MercoPress. South Atlantic News Agency

Falklands lawmakers discuss food prices and market solvency to encourage competition

“Can the Honorable Gavin Short please say whether in the Falklands have any mechanisms or agency that could be used to investigate the grocery retail market?”

A spirited discussion surrounding food prices was prompted by a question from MLA Teslyn Barkman in Legislative Assembly last Wednesday, 31st May. MLA Teslyn Barkman asked MLA Gavin Short about the UK’s government’s decision to investigate food pricing. “Can the Honorable Gavin Short please say whether we here in the Falklands have any mechanisms or agency that could be used to investigate the grocery retail market?”

MLA Short responded that no such mechanism currently exists since the UK government “has authority vested in legislation which does not exist in the Falkland Islands.”

MLA Short then mentioned comments made by MLA Barkman.

“My Honorable Colleague has previously referred to an analysis in the 2020 State of the Economy report showing that there are sectors in which there are a small number of businesses, that have higher profit margins than those in which there are a large number of businesses. And further, that the profit margins of those ‘monopoly’ and ‘oligopoly’ sectors are higher than the EU average.”

However, MLA Short said, he could now add that the Policy and Economic Development team has reviewed the underlying data and confirmed that the wholesale and retail trade sector, which would include shops selling food, was not one of the five sectors identified in this analysis as having extremely high profit margins.

Standing again, MLA Barkman said: “An unfortunate assumption is made that cost of living is just about the cost of food. The cost of food is also something that’s related to many other different sectors of the economy, which all drive inflation. And what that report did outline was that there are sectors which have not got the regulation, which are causing cost pressures across the economy, and that includes the retail market here in the Falklands.”.

MLA Mark Pollard also stood to comment. “I would probably caution against trying to regulate the industry, but we should probably be taking steps to look at perhaps how we can reduce the cost .... It could be argued we already do it in terms of meat for example.”

MLA Roger Spink was in favor of a market-driven direction. “We don’t need to look very far to see how effective price controls are. Our neighbors have had them for many years and have been singularly unsuccessful in combating inflation. I would say that competition does drive prices. I’ve spoken to several retailers who are looking forward, if food prices in Britain drop, in bringing in foodstuffs at lower prices as soon as they can. And they will compete vigorously in the market and the consumer will drive prices down. “We don’t have a great history of effective regulation in the Falklands. And if we can encourage competition I think that is the way forward.”

In response to this MLA Short said: “I believe the United Kingdom Conservative government is now taking an interest in the retail pricing sector, looking to see whether some sort of capping process can take place. So it is not impossible.

I believe there might be also a country within the European Union that actually does this sort of thing.”

MLA Barkman also responded.

“I find myself in roaring agreement with my Honorable colleague Roger Spink, because exactly what we’re talking about is introducing competition into areas that are monopolies or oligopolies which would then also helpfully benefit the Falklands economy.

We have got a very different setup to the rest of the world and it needs “I find myself in roaring agreement with my Honorable colleague Roger Spink, because exactly what we’re talking about is introducing competition into areas that are monopolies or oligopolies which would then also helpfully benefit the Falklands economy.

We have got a very different setup to the rest of the world and it needs a Falklands bespoke approach to how we do that. But there shouldn’t be an assumption that efforts to regulate sectors that have got only a few specific players in them is necessarily a bad thing. We’re talking about the security of the people. And the government has got a distorting role in the Falklands compared to other administrations.”