April 02, 2012
Prime Minister Hubert Ingraham on Saturday night suggested that a decision made by the Christie administration in 2006 to approve the sale of City Market to a foreign group and a small prominent Bahamian private investor group ultimately led to the crisis the food store chain is currently facing.
Providing a history of City Market, Ingraham noted it was originally Bahamian owned.
One of the early decisions of the Progressive Liberal Party (PLP) upon coming to office in 1967 was to approve the well-known Winn-Dixie chain of supermarkets in the United States to buy the food store chain, Ingraham said.
He noted it was also the PLP government that approved Barbados Shipping & Trading, along with a small Bahamian private investor group, to buy the company back from Winn Dixie in 2006.
The Barbadian company was subsequently acquired by the Trinidad-based firm Neal & Massey.
According to Ingraham, at the time of the sale to the Barbadian group in 2006, 1,350 individual Bahamians and pension funds owned shares in City Market.
Many of these investors were company employees and small investors. Some were approaching retirement, the prime minister said.
"In the second year of operations the new owners reported a net loss with negative cash flow. Thus began the endless spiral downwards which included the endless need for additional injections of cash," Ingraham said at a Free National Movement (FNM) rally in Fox Hill.
"The shares began to be traded over-the-counter. In 2002 they traded as high as $22.75 per share. It was in 2002 that the Christie government came to office. Today the shares are not listed nor traded over-the-counter.
"You can not give the shares away. Dividends have long since ceased. They were last paid in 2007. The company is insolvent. The shares are, in my opinion, worthless."Ingraham added: "The foreign owners and their Bahamian co-shareholders paid a pretty penny for Bahamas Supermarkets Ltd. (the parent company of City Market). They subsequently had to inject many more millions before having to walk away from City Market. They left in their wake widespread uncertainty."
Ingraham added: "I know that City Market's employees are all very concerned about their pension. We are told that your pensions are secure. Further we will do the necessary also to ensure that you are dealt with in full compliance with the law with regard to any severance pay you are entitled to receive.
"It is a sad reality that hundreds of Bahamian shareholders lost their investment. And hundreds of Bahamian workers now have unstable employment and face an uncertain employment future."
Ingraham said, "It is at a minimum quite ironic that the same Christie who now says that he puts Bahamians first, in 2006 turned down a bid to purchase City Market by a group of Bahamians who at a minimum may have better understood that Bahamian consumers generally want brand name products and that Bahamians don't change to buying unfamiliar generic goods quickly.
"Whatever is the case, the basic matter is this: the Christie administration agreed to a purchase which resulted in the destruction of a longstanding supermarket chain that generations of Bahamians grew up with."
The Finlayson family acquired Bahamas Supermarkets in late 2010, but the company continues to experience losses.
Company President Mark Finlayson told The Nassau Guardian on Friday that the owners were in talks with Super Value regarding a possible sale.
The jobs of more than 300 people now hang in the balance.
Rosalie McKenzie, office administrator for the Bahamas Commercial Stores and Supermarkets Warehouse Workers Union (BCSSWWU), told The Guardian that after meeting with executives of Bahamas Supermarkets Limited last week, workers were assured that all entitlements will be paid.
She noted that the workers will be entitled to their severance pay, in lieu of notice pay, vacation pay and pay for the weeks they would have worked and have yet to be compensated for.
McKenzie said that reassurance is a relief to the employees.
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News date : 04/02/2012 Category : Nassau Guardian Stories