A supermarket boss has questioned whether a government-backed grocery co-op would realistically be able to reduce prices on the shelves.

Last week, the public works minister Lieutenant-Colonel David Burch, told MPs in the House of Assembly that the old Heron Bay Primary school would be repurposed as a government-backed co-operative grocery store.

In the statement, he said it would “introduce competition into the local food market to reduce overall food prices in Bermuda and provide investment and wealth-generation opportunities”.

Colonel Burch also claimed that grocery stores had failed to pass on custom duty cuts, made by the Government two years ago, to consumers.

Asked if the duty relief had been passed on, Zach Moniz, manager of grocery chain Lindo’s Family Foods, said: “Yes.”

He added: “Any reduction in a cost associated with landing an item is going to directly impact the retail price of a good.

“However, there are three direct costs associated with landing a good: initial price, duty and freight.

“An increase or decrease in any of these will impact the final retail price and are often in flux. Freight costs can increase, even as initial wholesale prices go down, which means that a reduction in one area doesn’t necessarily lead to a reduction in all.”

Mr Moniz said Lindo’s had been running its Essential specials — an initiative developed in collaboration with the Government — for almost two years.

“So, to hear the Government say that prices have not been affected is perplexing.

“The items featured in the Essentials list for the most part already had very low duties, mostly around 0 to 5 per cent.

“As such, the duty represented a very small percentage of the first cost and had a very low impact on the price the consumer pays.

“Lindo’s also procures most of its goods from local vendors who are responsible for applying the duty relief along with initial and freight costs.”

Asked if a government-backed co-operative would help reduce cost and whether he welcomed extra competition, Mr Moniz added: “If this initiative does not directly impact the freight costs and wholesale costs from the international vendors, then it will not reduce overall costs.”

Figures released this week by the Government showed that inflation was measured at 2.3 per cent in August, the latest statistics available.

However, within that overall figure was a rise of 7.2 per cent in fuel and power and a 3.5 per cent increase in food.