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Whopping rise

Burger King slapped with 82 per cent increase in import duties

Barbadians will soon have to dig deeper into their pockets for some of their favorite Burger King meals, with the international fast food chain blaming a steep rise in import duties.

The company said it has been slapped with a whopping 82 per cent increase in import duties, which will result in price increases in the coming days.

The duties on some of its processed chicken products, including its popular chicken breasts, patties and nuggets, which local producers cannot supply, rose from 20 per cent to 102 per cent at the beginning of September.

General Manager Ryan Walters told Barbados TODAY while the company had been absorbing that cost for the past three months, it could no longer afford to do so since it was taking a massive financial hit as a result of the dramatic increase in the duties.

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General Manager Ryan Walters

“We are now at a stage where we can’t bear the full brunt of the cost anymore. We have no alternative but to pass on some of the cost to our customers,” Walters said, without indicating when the price hikes will take effect or how much more it will cost customers.

Walters also declined to say how much the company was currently losing as a result of the increased duties, although he stressed it was having “a tremendous impact”.

The general manager explained that while Burger King sourced most of its inputs from local producers, the processed items were not available locally.

“Essentially we have to produce products to a certain specification. As it stands now there is no local entity that can do that, so we have no choice but to procure those specific products from approved suppliers outside of Barbados,” Walters told Barbados TODAY.

He said the local franchise holders Restaurant Associates Barbados Ltd were in discussions with a local producer in a bid to have the meat processed here to international specifications.

This would mean the producer having to purchase the relevant equipment, but it could be a lengthy and costly process, he said.

“We are engaged with a local producer who has already started the process in terms of seeing if they would be interested in procuring the necessary equipment and aligning their operations to be able to start manufacturing these products. But it would require some capital investment.

“That process would probably take about 12 to 18 months to be completed . . . . The affected products are BK Core products and wherever you visit a Burger King in the world you will get these products. They can’t be made here at this time so we are not just importing things that can be done here,” he explained.

“From inception, we have made every effort to support the local industry and we have committed to this. From 2013 to present our local purchases with major suppliers increased by over 100% of which 30% of the increase is representative of purchases from the local manufacturing sector. Additionally, we now employ over 150 persons; this makes our growth of new jobs the highest in Barbados in each year since we started.

“Our growth has also allowed us to contribute almost six million dollars to government agencies over the period” Walters added.

He said “if the Government is unwilling to return the duty to 20 per cent it is unlikely that Burger King will be able to build the next three restaurants that are in the planning stages for the next 18 months. Our owners want to invest more in the Barbados economy and create more jobs but the increase in duty is killing their enthusiasm”.

“We might even have to reconsider our existing operations, our staff levels and so forth,” the Burger King executive told Barbados TODAY.

The relevant authorities have already been written to requesting a reduction, and the company had been asked to outline its economic contribution to the country, he said.

“So there is some dialogue going on, but obviously time continues to fly and we continue to pay the duties on each container as they enter our ports” Walters said.

He said the company would not be reckless but will carefully “manage what we pass on because we cannot expect people to pay way beyond the value of a product to protect local producers that will not produce the products that our customers want”.

Over the past two years officials in the local poultry industry intensified their calls for Government to increase tariffs on imported poultry products in an effort to protect the local market.

As it related to its overall performance, Walters said Burger King had witnessed an increase in sales year on year, adding that people were responding positively to the brand.

“We have had a very encouraging response at Warrens. Sky Mall continues to be the leading restaurant and we are holding our own in terms of customer traffic at the other locations,” he said.

Walters concluded. “We are in no way trying to deceive or cheat the local producers or the government, all we ask is to be given the opportunity to continue to transition to local production overtime which will help boost the economy. This obviously is not an overnight task but we want to be treated fairly during the process”

Burger King officially started operations in Barbados in January 2013 at Sky Mall in Haggatt Hall, St Michael.


marlonmadden@barbadostoday.bb

5 Responses to Whopping rise

  1. BoBoTheClown November 24, 2016 at 10:59 am

    Most bajans wouldn’t let the rise in price hinder they love for junk foods.

    Reply
  2. Pat McChlery November 24, 2016 at 12:34 pm

    As usual they are going to run them!! typical..we can only have local things..makes me sick..

    Reply
  3. Hal Austin November 25, 2016 at 6:38 am

    Food inflation is a serious problem in Barbados and official figures are doctored to hide this. Further, low paid people spend a higher proportion of their income on food, therefore food inflation impact s on them more seriously than the wealthy.
    I have long called for a prices and incomes commission -no pay rises or price increases without approval.
    Here is how the supermarkets bolster food inflation: import have to pay tariffs, that is passed on; with transport costs increasing, that too is passed on; supermarkets have to pay various taxes, including national insurance, income tax and VAT, all that is passed on in the cor e prices; when consumers buy goods, a further VAT is added to the cost, along with profits of anything from 15 – 50 per cent.
    Even where good are zero rated for VAT, presumed costs are added to the retail prices. I suggest we go back to the corner shop system, with shops forming themselves in to a wholesaler with profits going back in to the company, thereby reducing costs to coop members.
    Consumers will benefit not only by getting cheaper goods, but also by returning to the system of credit (trusting good until next pay day). Supermarkets used to be called cash and carries, and that wa for a reason.

    Reply
  4. F.A.Rudder November 28, 2016 at 10:45 am

    Hal you just brought back life, trade and commerce to Roebuck St. Saturday mornings in the 1950’s was a road block. High st and Roebuck St Police Box with the traffic directing constable was a center of activity with marshaling hands pointing in uni directional formations.

    Reply
  5. J. Payne December 3, 2016 at 4:52 am

    These foods are mixed to become body craving. High amounts of carbs leads to leptin resistance which makes the body crave carbs even higher.

    Reply

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