Higher price of imported goods ‘the major concern’ for local businesses

Imported inflation, the higher price of imported goods as a result of supply chain disruptions and higher costs of freight, is the major concern of most companies and small businesses in Malta, BusinessToday has learned.

Malta Chamber president Marisa Xuereb said that this higher cost of goods was the result of a number of factors, including scarcity of materials, transportation costs and delays in deliveries.

She said that local businesses were having to face the effects of global issues, like COVID and Brexit.

“The local pharmaceutical industry was particularly hard-hit by Brexit,” she said. “Other sectors, on the other hand, are facing huge disruptions in the supply chain that is leaving businesses reeling.”

Xuereb said that further concern was mounting as to whether the UK’s Brexit deal with the EU would be jeopardised once France takes on the presidency of the Council of the European Union on 1 January, in view of the current standoff between the two countries surrounding fishing rights and immigration disputes.

And wheras international business organisations were reporting the rising cost of energy prices as of major concern for their members, this was not the case in Malta.

“Energy prices in Malta remain stable and the government has committed itself to retain this status quo,” Xuereb said. “This puts us at odds with other countries where the government has not stepped in as the Maltese government has done.”

Philip Fenech, SMEs Chamber deputy president, agreed.

“Rising energy costs were absorbed by the government and that was crucial for many small businesses,” he said.

Fenech said that this, coupled with the effective handling of the COVID-19 pandemic, have left Maltese businesses with a more positive outlook than many of their counterparts in larger countries.

“But it is imperative that, even though measures have been released, we do not become complacent now, losing the ground we have gained over the past months,” he said.

“Our message to our members and all business owners is to adhere to minimal good practices, such as social distancing, face masks and the use of sanitisers, especially now that we a spike in COVID-19 cases is being recorded worldwide.”

Fenech said that staff shortage was also a major concern for local businesses, as many struggled to fill vacancies on a daily basis.

This issue was one of the reasons why the SMEs Chamber this year decided to promote Black Friday deals throughout November, instead of having them concentrated over one long weekend.

This decision resulted in much less over-crowding and queueing in retail outlets.

It also helped those many businesses already facing staff shortages and which would have been hard-pressed to find staff to cover the shifts needed to cater to the larger crowds common in previous years.

Black Friday proved a success for many sectors, with casual wear, household goods and gadgets proving to be the most popular items.

Luxury wearable items, such as jewellery and watches, recorded lower gains.

“We are also very pleased that retailers have reported a considerable increase in online purchases,” Fenech said.

He said that equally encouraging was the fact that household consumption and spending patterns had remained consistent throughout the pandemic.