31 Dec 2010

American Samoa Chamber of Commerce opposes price controls

2:32 pm on 31 December 2010

The American Samoa Chamber of Commerce says price controls will do more harm than good for the territory.

Early this month, the governor Togiola Tulafono said he was checking whether the government could temporarily impose price controls on basic consumer goods.

However, the Chamber says while price controls appear reasonable on the surface, the reality is that they do more harm than good because a price controlled item becomes unprofitable to re-order, or even to sell from existing inventory.

It says a rice importer who is not allowed to take a marginal profit for each bag of rice will quickly turn to something which does provide a better profit.

The business group says the territory's problems run deeper, being caused by sudden increases in the overhead of doing business, combined with a sharp increase in unemployment.