Our Readers' Opinions
July 15, 2011

The Marketing Corporation came into operation in 1959. It was set up to facilitate the export of sweet potatoes to Trinidad. When the opportunity presented itself, it started exporting ground {{more}} provisions of all types to the USA. Still later, utilizing the unused capacity in the weekly banana boats to the UK, it commenced exports to that market. The establishment of Caricom enabled it to consolidate its hold on the market for sweet potatoes in Trinidad and also to start exporting carrots to Guyana. Despite all this activity, little attention was paid to the local market. Early in the seventies, however, some rooms were procured on James Street in the present Port Authority building. There the Board started retailing vegetables.

Our main aid donor at the time was the UK Government, and they had been very impressed by the performance of the Corporation. They, therefore, decided to finance a new building for the organization. That is how the Marketing Corporation got its present premises. When the building was completed, the Board of the Corporation decided to convert the vegetable retail outlet into a full supermarket. As neither the British nor the local Government would provide funds for the establishment of the supermarket, it had to be financed by bank loans. In its initial years, the venture was a great success, even paying dividends to the Government, its owner, who had not put any equity capital. The main aim of the operation was, however, to help to control prices in our then very oligopolistic supermarket sector.

Success was due to three factors. There were fewer supermarkets then; less competition meant that margins could be greater. Secondly, the new supermarket had a good range of fruits and vegetables which were not only profitable but brought the customers who then bought other things. Thirdly, the business was run by a group of men dedicated to seeing it succeed, even though it brought them no special financial reward. The group included V.I.Beache, the Minister responsible for the Corporation, who spent every Saturday morning there, the Chairman, who did likewise in addition to daily lunch time visits, and a very dedicated staff. This was headed by Clinton Antrobus and included Baldwin Johnson, Cyril Howard, Rufus Pemberton and ‘Parson’ Thomas.

The group had an extraordinary bit of luck. The Commonweath Secretariat provided them with a very able accountant from India, Indar Pardasani. He, with Baldwin Johnson, set up and supervised an accounting system which would reveal if an item as small as a bundle of chive had gone missing. It was their management accounts that formed the basis of the monthly Board meetings.

A commercial enterprise cannot rely on the idealism and altruism of one group of men for its continued success. They will pass from the scene. One must, therefore, look at what motivates people. It is generally accepted that people do not work merely, if at all, for the public good. They work primarily for the benefit of themselves and their families. That is why communism failed. It is also why supermarkets, given the tremendous scope for leakage from them, are best run by families or professional chains in which employees often hold shares. Unsurprisingly, then, the Government’s supermarket began to make losses. I am not certain when this started, but the earliest year for which I now have accounts is 1997. It was making losses then and continued to do so every year up to 2009. What kept the thing going for so long were the profits made on the importation of rice and sugar which the Corporation also handled. The availability of credit from the NCB also helped. But the importation of rice was returned to the private sector and that of sugar handed over to the Input Warehouse. Further, NCB has now been privatized and credit will not be so readily available. National Properties, the supermarket’s present owner, would have had to be subsidizing FoodCity even more heavily than it has recently been doing. What this in effect meant is that the monies National Properties realized from selling land would have to go to subsidizing Food City rather than building the airport. This made no sense. It was better for the Government to quit the business altogether, particularly so, after strenuous efforts in recent years to turn the venture around did not quite come off.

Some may feel the Government should have sold out to a local group, but supermarket business these days is about size. Among the world’s most successful groups are Walmart and Tesco. Walmart has about 8,500 stores in 15 countries, with a turnover of over $421 billion, and Tesco 5380 in 14, with a turnover of £67 billion. Nearer home, Hi Lo in Trinidad has over 20 stores. Big supermarket chains are virtually able to dictate the prices they will pay to their suppliers. Moreover, there are economies of scale in transport, warehousing and computerization and other aspects of the business. Consumers benefit from these advantages.

When Consolidated, which will be replacing Food City, starts operating here, it will have 12 stores in two islands. Currently, its turnover is about $400 million. It is also in alliance with the US discount chain SAVE- A-LOT, which has 1,200 stores and turnover of $4 billion. Surely, this is the sort of OECS integration that will help to overcome the problems posed by the very small size of our country. For those who say the St Lucians are taking us over, let us not forget Vincentians will have shares in the new company. Remember, too, the brewery operations of Antigua are being moved to SVG and an Antigua newspaper is already being printed here. What is the alternative to trying to make OECS integration work?