Thumbs down to tax on soft drinks

Operators of Banks Holdings Limited (BHL) have given thumbs down to the International Monetary Fund’s (IMF) suggestion that Government impose a tax on soft drinks.

Chief commercial officer at BHL Ray Chee-A-Tow
Chief commercial officer at BHL Ray Chee-A-Tow

Chief commercial officer at BHL Ray Chee-A-Tow said if the Freundel Stuart administration accepted that recommendation, the group’s soft drink manufacturing business, the Barbados Bottling Company (BBC), would be negatively impacted.

He gave his assessment today, following a tour of the BBC’s Newton, Christ Church plant with company officials and employees and Minister of Commerce and Industry Donville Inniss.

BBC, which hires just over 70 people, is the local franchise holder for a number of international brands including Coca-Cola, Powerade and Sprite. It also manufactures a range of local beverages including Frutee and Cranberry Flavoured Water.

Following a study of the Barbados tax system earlier this year, the IMF put forward a number of suggestions for government to raise its revenue, including taxing semi-processed and processed foods and soft drinks among other items, at the standard rate.

Chee-A-Tow said BBC would suffer if the Freundel Stuart administration accepted that recommendation.

“Our biggest challenge is that the environment that we are in right now is a value economy. People are concerned about their disposable income. The beverages that we produce are not high-end, nothing in our portfolio is considered a luxury good . . . The products that we make are part of the commodity basis where you consume on your disposable income, so you don’t say ‘I am not going to drink water today’,” he explained.

Acknowledging that a tax on soft drinks would create “somewhat of a negative impact on enterprises”, Inniss maintained it was about people consuming the products in moderation.

At the same time, the Minister said he was not overly concerned about any proposals “from any party about additional tax on soft drinks”.

He reiterated that the recommendations were simply made and the Government was not obligated to accept any of them, adding that stakeholders including the opposition Barbados Labour Party were examining those proposals and putting forward their critiques.

“The Government . . . is not obligated to accept their proposals or proposals from any local or regional body on any issues per se. Of course having engaged them [the IMF] we would be foolhardy not to listen and take note. What the Minister of Finance has done with the support of Cabinet is to have engaged others, local folks, to take a serious detailed look at the proposals and look at all the options available. Consultation continues,” he said.

“I don’t want people to start planning their lives, either personally or in business, as though what is proposed is carte blanche the position of Government. We are still a sovereign state and the executive arm of Government resides on Bay street and the legislative arm resides in Bridgetown at Parliament, not in Washington DC.”

2 Responses to Thumbs down to tax on soft drinks

  1. Martyn Ackee Tree
    Martyn Ackee Tree November 13, 2014 at 12:39 am

    They should be taxed as they are large contributor to the non-communicable diseases in this country. When a person could buy Bottle water cheaper than a sweet drink we have real problems. Simple as compared to complex SUGARS & obesity to start with but not the sole contributor. Everyone wants the government to to to to but not willing to to to …. where do you drawn the line.

  2. Marco Aurelio Schaumloeffel
    Marco Aurelio Schaumloeffel November 13, 2014 at 12:48 am

    BHL obviously will tell us that they don’t like it, because it will reduce their profits. A higher tax on soft drinks will reduce people’s health problems in the long term and the government’s bill (ours) in the health sector.


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