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Fault BHL

Dr marshall holds brewery responsible for takeover bid

The Barbados economy is in danger of being “denationalized” with key decision-makers residing abroad, a leading academic has warned amid a takeover bid for Banks Holdings Limited (BHL), the island’s largest beverage producer.

Director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) Dr Don Marshall told Barbados TODAY the move by SLU Beverages Ltd, the largest single BHL shareholder, to purchase all outstanding shares at BDS$4 (US$2) per share after it acquired the 13.1 million shares of Massy Holdings last week would result in the “fall of a local titan” and there were glaring lessons for Barbadian enterprises.

“There is a danger in the economy becoming increasingly denationalized, in the sense that critically more and more important private sector related decisions in our country that are supposed to marry well with our macro economic policy are being determined outside of Bridgetown.

“So whether we are talking about banking, where that is being determined in Port of Spain and in Canada; or whether we are talking about certain kinds of import, trade and other business, and now in this case manufacturing or beverage business, that is increasingly going to be a decision taken offshore. I say that it is a titan that is fallen.”

Dr Marshall, who specializes in international political economics said while the move would be hailed by some as a victory for shareholders, it was alarming to those who understood that the Barbadian economy and society were stitched together for the effective growth and development of the country.

“You have to be concerned when greater and greater companies, small businesses and so on are being overtaken by other interests outside your domestic interests.

“We must see it as part of our enterprise legacy that Banks Beer, Plus, Coconut Cooler these have been important artifacts, products of Barbadian vintage. We do know there is nothing quite like a Banks Beer and we do know there is nothing like a Plus. Indeed we can say you’re as Bajan as Banks Beer or as Bajan as a Banks Plus.”

Dr Marshall lay the blame squarely at the foot of BHL, which he said had made itself vulnerable to capture by SLU Beverages Ltd which is a holding company of Cerveceria Nacional Dominicana S.A, a leading beer and malt producer in the Dominican Republic, controlled by Brazilian corporation Ambev S.A.

He insisted that BHL had failed to pay attention to its brand, product improvement, efficiency and expansion.

“This is capitulation on the part of those that have been in control of Banks. The building blocks are simply this: if you become a publicly listed firm you go on the stock market, you raise capital; but now you have neon lights on you as a publicly listed company.  Other similar companies that are bigger will be looking at how you operate; your competitors will be seeking to outstrip you in the competition stakes. So you have got to develop a strategy for going global and it means that you have to continuously improve.

“You can’t be moaning to the Government to improve the enabling conditions to do business and at the same time fail to do your homework in relation to research development, product innovation, finding new markets and the rest of it. Because your shareholders who expect a bigger return on their dividends are going to be saying ‘this company is not growing’.

“So a bigger company that sees the opportunity because you have got a decent enough brand, a decent enough product says ‘oh so you don’t know how to go global well I will take over and go global for you’. So when they do that the shareholders whose only loyalty is not the flag but to the colour of  money will simply say ‘we like it green,  and we like plenty of it’” he told Barbados TODAY.

Against this background, he argued that a notice issued by BHL last Thursday urging its shareholders not to make any decisions on giving up their stake in the company until a valuation of its shares was conducted would not work.

Dr Marshall said it was a situation businesses should seek to learn from while mirroring the strategies of Goddards and Chefette, which he said were two examples of Barbadian companies that best represent how businesses should develop.

“We have to look at the Goddard example as the best that Barbados is seen by way of entrepreneurial expression; we have to look at Chefette as the best by way of sustaining and protecting one’s brand.”

The political economist stressed businesses must wake up to the reality that it was their duty and not Government’s to ensure they are competitive by paying attention to regional and hemispheric markets and trade agreements.

“Markets can be politically constructed and politically maintained but firms compete, not states,” he cautioned.

“We can’t always be beating on the Government to do this, to do that. Both administrations have provided an enabling environment, they have signed the EPA [Economic Partnership Agreement] and all kinds of agreements that open up new markets, but a Brazilian can’t drink Plus and the people in Belgium aren’t drinking Plus and the Dominican Republic haven’t tasted our Coconut Coolers.  So whose fault is that?

“A Brazilian still does not know the taste of Plus but they will come to know one now.”

22 Responses to Fault BHL

  1. seagul October 6, 2015 at 9:15 am

    There is no danger in the economy becoming increasingly denationalized….look around Mr Sir Director. Barbados is being sold off to the highest bidder–land, companies……The same would happen to Goddards and Chefette tomorrow if the price is right. Correct… the sense that critically more and more important private sector related decisions in our country that are supposed to marry well with our macro economic politic are being determined outside of Bridgetown. So we are not going to rush and buy up the premiums to lose our hard earned cash Mr Director.

  2. Watchman October 6, 2015 at 9:19 am

    Isn’t Banks from Guyana ?

    • bajanguyster October 6, 2015 at 9:24 pm

      banks only buy the name sir not the make up of the beer

  3. carson c cadogan October 6, 2015 at 10:40 am

    I have always smiled when I heard Bajans say that “Banks Beer” is the beer of Barbados.

    The only thing Bajan about Bank beer is the water and Labour which go in to making the product.

  4. jrsmith October 6, 2015 at 11:43 am

    This could be the best thing ever happen to Barbados, because ,it sort the men from the boys ,privatisation, could we not see this coming, I always say Barbados is right for the picking but not by bajans.

    This is going to make the majority of bajans scared, our fault , new businesses arriving was suppose to employ bajans on a one to one basis with the chance ,that a bajan would take over from the foreign management that failed.

    We are suppose to be educated people, but when the new day dawn ,can we find the required top management from our own bajan people.

    Not a bad idea , giving the Brazilians a shot at one of our businesses, we might learn a lot, from real foreigners.

  5. Olutoye Walrond October 6, 2015 at 11:55 am

    What is this big obsession with where Banks Beer originated? This company has been in Barbados for over half a century now. The shareholders are/were Barbadian; the workers Barbadian. How much more Barbadian can it be?

    • Andrew the Voice October 6, 2015 at 5:03 pm

      Barbadian Owned would be nice.

      • bajanguyster October 6, 2015 at 9:34 pm

        i really dont think you all really understand when it comes to banks and what happen with banks of guyana,it is like two company having the same name and want to go on the international market but the owner are from two different countries ,so that it what happen anyhow banks is our own meaning banks beer,the brand name is from guyana but we paid for that brand name,we could of change it but we didnt

  6. Mark Wrd
    Mark Wrd October 6, 2015 at 12:33 pm

    Did you now wake up from a long sleep? Barbados’s main foreign exchange earner is tourism but how many hotels are owned by Barbadians . Our economy was denationalized long ago .

  7. Watchman October 6, 2015 at 12:33 pm

    The obsession is because of that fact of Banks being from Guyana is what stopped the foray into the international market using the name Banks. For that reason, the company never really was able to realise its potential. Depending on the local market was fine 50 years ago, it’s not fine now.
    The brand Banks was not Barbadian, anymore than Coca Cola made in Barbados makes Coca Cola Barbadian, or a whopper made in Barbados makes Burger King Barbadian.

  8. Movement of Concerned Citizens
    Movement of Concerned Citizens October 6, 2015 at 1:53 pm

    “An adequate solution to a problem is unlikely to be obtained with an incorrect analysis and diagnosis of what has transpired.”

  9. Frank Fowler
    Frank Fowler October 6, 2015 at 3:12 pm

    Banks Barbados bought the rights to use the name in Barbados decades ago, and the two companies share the signage on the international bottles sold in the USA

    • bajanguyster October 6, 2015 at 9:37 pm

      well said

  10. Les Carr
    Les Carr October 6, 2015 at 5:01 pm

    It’s already done. Gem dun.

  11. Les Carr
    Les Carr October 6, 2015 at 5:05 pm

    When vision was needed none was in sight. Glaring lesson for who? There are no remaining power house Bajan companies. We need to stop fooling ourselves and awake and smell the coffee.

  12. Alex Alleyne October 6, 2015 at 5:39 pm

    There is no product made by BHL that is one hundred percent bajan. If selling it off will bring more jobs its ok and we all can make the same arguments as we do for BNB selling out to Republic Bank .

  13. Joel C. Payne
    Joel C. Payne October 6, 2015 at 7:03 pm

    Time to get over it. The remaining companies can just join the Eastern Caribbean Securities Exchange.

  14. carson c cadogan October 6, 2015 at 8:06 pm

    This is actually a good thing for Barbados.

    Under International Management manufactured Alcoholic and non Alcoholic beverages from Barbados will now get a greater share in the export markets. This will mean an increase in foreign exchange and hopefully more jobs for Bajans. New, modern technology will no doubt be also introduced into the manufacturing plants.

    The old Management was not cutting it. Running a successful business today calls for more than parading half naked girls trying to find out who will be the calendar girl for the coming year.

    The old Bajan

  15. Heather Cole
    Heather Cole October 6, 2015 at 8:32 pm

    Antarrah Gilkes the PM is a politician who sadly does not understand economics. If he had, he would have been this own Mnister of Finance and Economic Affairs and he would not have made that grave mistake of having Mr. Sinckler as Minister of Finance and Economic Affairs. While he wants a republic, the economy is already under a new form of colonialism.

    • bajanguyster October 6, 2015 at 9:39 pm

      wow you are good man mmmm keep it going

  16. Sam Clarke October 7, 2015 at 5:19 am

    Dr. Marshall should get a grip. This is capitalism, so if you are in the game you play by the rules. With your thinking, you would like to see all the business nationalized or in the hands of nationals.
    It would be a disaster if we were to accept your position and have these businesses nationalized.

    Since you seem to want nationals to own these businesses, then buy them.
    You cannot want your cake and eat it at the same time Sir. Look at the other local brands, who simply stay in Barbados, such as chefette. A brand that is stagnant , because the laws of economics still dictates. This brand has squeezed its maximum growth in Barbados, yet those who manage it cannot see that expanding internationally and or franchising the brand would bring added growth and foreign exchange to Barbados.

    So enough of the xenophobia .


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