North West Company Inc. (“North West”) the parent company of Roadtown Wholesale/Riteway was called out in the House of Assembly on 23 July by the Leader of the Opposition Hon. Marlon Penn for improper business practices.
The Leader of the Opposition made the comment during the debate of the Consumer Protection legislation as he noted that trade initiatives are necessary to deal with unfair business practices in the Territory. In fact, it was in reference to such unfair practices that Hon. Penn made the complaint about North West.
In bringing the matter to the attention of the members of the House of Assembly Hon. Penn elaborated on his point of unfair business practices by explaining how mega store Walmart wiped out community shops in the United States. In such manner he said that North West can affect local small businesses.
As he mentioned the situation the Opposition Leader said: “It has to do with North West the parent company of Riteway and the wholesale company. When that license was issued, it was issued with some specific conditions in terms of their operations. How it should operate within this environment. We have a situation right now where this is becoming similar to the Walmart effect.”
“We have a similar issue here where they were restricted from selling certain goods and services and Junior Minister you could research this and see. They are still selling these goods and services despite their restrictions. So, you have the Island Services who are being squeezed out of the market because they are selling products that they shouldn’t be selling. You have the radio doctors – family owned companies who have been around this Territory for decades, generations who have passed on from generation to generation who would virtually disappear if we do not do something about this antitrust behavior,” Hon. Penn added.
The Leader of the Opposition further stated that it is difficult for local companies to even try to compete with North West because it is huge in comparison: “You have a company with a capitalization of over two billion dollars, this is a publicly traded company competing in an environment with several small businesses – they are the wholesaler, and they are the retailer; so their selling you the product and they are still competing with you when you are trying to sell your product. That would not be allowed in a big economy like the US.”
Hon. Penn stressed on the fact that North West is a conglomerate and a giant in comparison to its local competitors. “Premier, I urge you…we have to move swiftly to ensure that the antitrust legislation accompanies this Bill to ensure that the unfair trade practices that are taking place right now where this behemoth of a company that has purchasing power in the range of two billion. How can local businesses compete with a company that has outlets in the US, throughout the Caribbean and Canada and all of that consolidated purchasing power?”
In suggesting a solution to the issue, the Leader of the Opposition mentioned a scenario in the USA where Time Warner was allegedly made to become smaller companies to minimize competitive edge. In this case he said that North West would have to choose whether it wishes to be a wholesaler or retailer. “They have to make up their mind whether they want to be in the retail business, or they want to be in the wholesale business. You can’t have both.”
Hon. Penn also complained that North West is even competing now with restaurants: “It even trickles down as far as food and selling food. they supply the food … to the restaurant and still sell the same food in their stores; well they cook the same food items …There’s no way that the lil food place next door could sell a plate of food cheaper than Riteway selling a plate of food because they buying their chicken from Riteway, they buying everything from Riteway so they can’t compete,” the Leader of the Opposition added.