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Bad brew

Banks caught off guard by dramatic hike in St Lucia duties

Banks Holdings Limited (BHL) is already feeling the fallout from a 70 per cent hike in duties on its brewed beverages going into St Lucia and it fears it could be priced out of that market completely.

But Minister of International Business, Industry and Commerce Donville Inniss intends to do something about it.

BHL was notified last Friday that effective April 1, certain items from more developed countries (MDCs) within CARICOM would attract the 70 per cent rate, based on Article 164 of the Treaty Of Chaguaramas, which differentiates between less developed countries (LDCs) and MDCs.

BHL also exports juices and milk into the St Lucia but only its Banks beer and Tiger Malt are affected.

BHL’s chief executive officer Richard Cozier, told Barbados TODAY the hike in duties have already started to impact on the company.

“Our products went into St Lucia up until Tuesday last week when this was effective from, simply on the granting of a licence to import and therefore were duty free,” explained Cozier.

“As it stands now they will be charged a rate of duty of 70 per cent on those exports. What it effectively means is that is not likely that it would be a receptive market. The duty will effectively price the Banks beer or Tiger Malt out of the reach of the average consumer,” he added.

Cozier said the company and the retailer in St Lucia were not in a position to absorb the increase.

“And there is no opportunity to pass it on. We had at least one PO [purchase order] in the system that they have put on hold unless something can be resolved. If it is not resolved effectively that PO will be cancelled,” he added.

Cozier forecasted that if the situation was not rectified soon, “that market would effectively be lost to us.”

“We would not be able to have a presence in the St Lucia market. As I said we were not doing any big set of numbers so that would be a concern. It would also be a concern if countries around St Lucia would implement the same article, Article 164 in which case we would effectively be out of all the OECS,” he said.

Following the correspondence on Friday, which took Barbados by surprise, there was a meeting involving Inniss, the Barbados Manufacturers’ Association (BMA) and other players in the industry, including BHL.

Other items to be affected by the increase include aerated beverages and solar water heating systems.

During the official launch of Superior Solar Power Solutions today, Inniss said he would be contacting his St Lucia counterpart this week to discuss the matter, adding that those talks would “not be for too long”.

“It is my intention not to rest on my laurel but to ensure that that is quickly addressed within the regional arrangements that we have,” he asserted.

Adding that the measure was effective until December 2018, Inniss said: “We are not going to sit back and just allow everything to come in here duty-free and then our people within our islands have to go into CARICOM and pay high duties”.

“St Lucia will do what they have to do to protect their industry and we will have to do what we have to do to protect our industry as well”.

He said he had also indicated to the Minister of Foreign Trade that the issue should be discussed at the 38th meeting of the Council For Trade And Economic Development (COTED) to be held in Guyana next month.


One Response to Bad brew

  1. Sanderson Rowe April 7, 2014 at 10:56 pm

    For ages now we in Barbados have been driving into the heads of our people to “Buy Bajan” or ” Buy Local”. St Lucia, by imposing this tax , is saying the same to its people in a more direct way,…. via the pocket.


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