Chamber of Commerce warns prices will rise as relief ends

The BVI Chamber of Commerce has warned that consumers could face higher prices in the coming months after the government’s temporary business and cost-of-living relief measures expired on August 31.

The Chamber said businesses continue to face increased product, freight, insurance and international logistics costs, along with shipping delays and limited supplies of some goods.

It cautioned that consumers may not feel the full effect immediately because much of the stock currently in shops and warehouses entered the territory under the concessionary arrangements.

The Chamber said prices could begin rising as businesses replace those goods with imports carrying higher purchasing and shipping costs, as well as restored government charges. It expects some of the more noticeable increases during the Christmas shopping period and afterwards.

“When our product costs rise, we pay more. When shipping rises, we pay more. When insurance rises, we pay more. But when the value upon which a percentage-based government charge is calculated rises, government can collect more,” Chamber Chairman Sinclair Flemming Jr said.

“That is the fundamental imbalance we have been trying to address. In a crisis, government should not receive an inflationary windfall simply because businesses are paying substantially more to bring the exact same goods into the territory,” he added.

The government introduced the relief package in May to address global fuel-price increases and inflation. It reduced duties on a protected basket of essential goods, calculated customs duties using the free-on-board value of imports rather than the cost, insurance, and freight value, and lowered wharfage and container-handling fees.

The Chamber had previously asked the government to continue the measures until December 31, with reviews every three months.

It also proposed retaining the free-on-board customs valuation, using documented pre-crisis costs as a baseline, preserving concessions for goods already purchased or in transit and gradually restoring government charges.

“We presented government with multiple options because this never needed to be an all-or-nothing decision,” Flemming said.

“Extend it. Review it every three months. Keep FOB instead of CIF. Establish a historical baseline. Grandfather goods already on the water. Or phase the concessions out gradually. There were several ways to protect government revenue without placing the entire increase back onto businesses and consumers at once.”

The Chamber urged businesses to monitor their landed costs and advised consumers that increases appearing in the coming months may reflect costs now entering the supply chain. It said it would continue advocating for measures that protect government revenue, businesses, employment, access to goods and consumers’ purchasing power.