ONE OF the largest supermarket chains locally, Super Plus, says it is willing to cut its margins on the list of items being subsidised by the Government to stabilise prices for the vulnerable.

On Tuesday, the Government gave details of how it planned to keep prices constant on targeted products by subsidising five items.

The commodities include counter and baking flour, rice, cooking oil and milk powder.

Director of Super Plus, Richard Chen, said his company would be reducing its margins to ensure that the benefit is passed on to the consumer.

Monitoring by CAC

"What is happening is that the Government is subsidising it, but retailers are also being asked to reduce their margin to meet that price, so there is some giving by the Government and some giving by the retailer," he said.

Industry, Commerce and Investment Minister, Karl Samuda, said on Tuesday that the Consumer Affairs Commission would be monitoring the prices of these items to ensure that retailers do not apply illegal mark-ups.

The prices on the listed items are expected to remain unchanged until the end of March.

The announcement of the subsidy followed a commitment by Prime Minister Bruce Golding late last year that the Government would set aside $500 million for this initiative.

However, he said, the Government planned to include a relief package in the next budget for vulnerable persons affected by sharp price increases.

Relief for farmers

A breakdown of the subsidy includes: counter flour - $110.8 million; baking flour - $85.5 million; bulk rice - $84 million; cooking oil - $18.9 million and powdered milk - $18.9 million.

"As a result of discussions that I held (Monday) with the president of the Bakers Association and with the Flour Mills, the decision was taken to place support on that particular item (baking flour) to enable the price of bread to remain stable over the next three months," he said.

Meanwhile, the Government has provided relief for farmers by subsidising fertiliser at a cost of $50 million. This is expected to bring about a 10 per cent reduction in the cost of farm produce to consumers.

Another $20 million will be provided to farmers in the livestock sector.

Subsidised goods

Minister Samuda has noted the following subsidised prices for grocery items at retail outlets:

Counter flour - $50 per kg

Baking flour - $45 per kg (in essence, the price of bread should also be stabilised as the ex-factory price of baking flour will not be increased)

Bulk rice - $50 per kg

Milk powder - $65 per 80 gram

Cooking oil (bulk oil) - $150 per litre