PATTYNOMICS

Errol Miller

There are some economists who maintain that fast foods are quite good indicators of the major economic trends in many countries. They have coined the term “Bergonomics” to describe and define this emerging brand of economics. In thinking about this matter it came to me that “Pattynomics” would really be the Jamaican version since hamburgers cannot yet rival the patty as a fast food in Jamaica. Although given our increasing tendency to copy and import everything from aboard, including rock stones, the patty could well be replaced by the hamburger in the foreseeable future.

While not being an economist, I am a patty-lover and eat several each week. I, therefore, decided to investigate whether movement in the price of patties actually indicated trends and tendencies in the Jamaica economy. Because of my regular practice of buying patties each week, I felt I could determine the price trends over a six month period quite easily. Tastee patties are my favourite brand. I only buy another brand because of some particular circumstance. So I decided to follow the pattern with this brand and also to make a few comparisons. Because of where I live most of my purchases of patties are made at Sugar and Spice Liguanea.

In the middle of June Sugar and Spice announced that it was raising the price of its patties from $16 to $17. Almost immediately after this, the Jamaican dollar was re-valued. In addition, the price of flour fell on the world market. Accordingly, the Jamaica Flour Mills had decreased the price of flour several times within the last six months. A rough calculation shows a 22 percent decrease in the price of flour since the middle of June 1996. The price of Tastee patties at Sugar and Spice has remained fixed at $17 up to the end of the year.

I decided to compare Sugar and Spice’s price with other retailers in the area. At Patta Kake a patty is sold for $17, at Mothers, it is for $18 and at the Texaco Station at Jacks Hill and Barbican Roads a patty is sold for $25. Hence, in comparison to its competitors in the area, no one is underselling Sugar and Spice’s Tastee Patties. It is the same price as one competitor and cheaper than two others.

Tastee is the foremost producers of patties in Jamaica. It manufactures a superb product. One does not know the relationship between Sugar and Spice Ltd and Tastee but the Sugar and Spice manufacture and sells Tastee Patties. The Tastee Ltd does a number of good deeds. It sponsors the very popular Tastee’s Talent Competitor which seeks to discover and exposing popular performing talent in the country. Recently, the company made a significant contribution to the University of the West Indies. I am sure that the Public Relations arm of the company could recite many other acts of good corporate citizenship.

Despite these good deeds, from all appearances, it would seem that the Sugar and Spice/ Tastee combine has failed in its most important relationship, that with its customers. Its failure is its lack of integrity with those who purchase its products. It has not passed on to them a reduction in the price of production that it has enjoyed since it last increased its prices in June 1996. All of its good deeds cannot compensate or justify this apparent moral failure.

But in this regard, it must be observed that the trend with the price of Tastee patties at Sugar and Spice is indicative of a large range of activities in the Jamaican economy. Banks have not passed on to their customers decreasing in interest rates that they have benefited from in decreases in Central Bank rates. Most wholesalers and retailers have not passed on to customers reduced cost resulting from the revaluation of the Jamaican dollar. They have all kept the benefits for themselves.

The point to note is that free market competition has not been able to rectify this moral failure because of the cartel-like action of the banks, wholesalers, retailers and manufacturers. At the root of the problem is the fact that the most efficient and best producers, like Tastee/Sugar and Spice, are content to sell their produce at a competitive price relative to the other producers but not a price which does justice to their customers. By failing to take the lead in the absolute relationship with their customers they take comfort in the relative relationship to their competitors. Morality is neglected in relation to market forces manipulated by a cartel mentality.

I decided that my only recourse as a consumer was to buy 22 percent fewer patties. If all most consumers were to take similar action that the fall in sales should promote some action on the part of the producers.

Judging from this very crude test of ‘Pattynomics’ it would appear that the economists that insist that fast foods may be good indicators of trends in the economy of a country, may be on to something. On the specific subject of Tastee patties, as a loyal customer, I would like to receive from Sugar and Spice and Tastee an explanation for the pricing policy over the last six months.