Beer Producer in $2 Million Expansion

Originally Published in The Nassau Guardian

June 26th, 2014

By: Alison Lowe

 

After shelving the plan just under a year ago out of anxiety over proposed tax 
increases, the Bahamian Brewery and Beverage Co. Ltd signed a $2 million 
contract this week to expand its facilities in Grand Bahama to take advantage of 
increased demand. 
 
Jimmy Sands, president of Bahamian Brewery and Beverage Co. Ltd., producer 
of Sands, High Rock and Strong Back beer, called the expansion plan “an act of 
good faith” that was taking place “in cooperation with” the government after it did 
not announce any tax increases that would impact the brewery in the recent 
2014/2015 budget. 
 
The expansion, which will increase the five-year-old beer maker’s storage and 
production facilities by 20,000 square feet in total, will lead to the creation of 15 
new permanent jobs, said Sands in an interview with Guardian Business ahead 
of a press conference to announce the move. 
 
In August 2013, Sands was up in arms after the government told him in a 
meeting that it planned to increase the duty he paid on domestic beer sales from 
$2 per liquid gallon to $3.50. This would have effectively slashed the ‘duty 
spread’ advantage the Bahamian Brewery and Beverage Company (BBBC) 
enjoyed over its main rival, BISX-listed Commonwealth Brewery, by 50 percent. 
Sands almost immediately cancelled a contract he had ready to sign with 
Freeport contractor, Frecon, citing concerns over the ongoing survival of the 
business in light of the proposed tax rise. 
 
Yesterday, Sands confirmed that this tax increase never in fact occurred. 
 
“They were talking about changing it. They never did change it. As you know the 
2014/2015 Budget just took place and in Mr Christie’s speech he did not change 
(the tax) in there, so to show good will I’m going to proceed with the expansion 
that we had in mind,” said Sands. 
 
The executive said he has seen increasing demand for the products produced by 
the BBBC and the expansion will facilitate the company in meeting this. 
 
“Year after year the growth has been a steady growth. The product has been well 
received. We’re doing as well as what I’d expected,” said Sands. 
 
The company currently directly employs around 70 people; indirectly it employs 
close to 100. 
 
Sands said he hopes the government continues to afford his company some of 
the same opportunity to grow as it afforded to its main competitor, 
Commonwealth Brewery, for many years by maintaining its tax advantage into 
the future. 
 
Commonwealth Brewery, the producer of Kalik and Heineken, was for 20 years 
the sole local producer of beer and took advantage of an $8 tax advantage over 
imported beer. Today, this has been reduced to $5, although Sands pointed out 
that the company does not incur the same shipping costs as the Freeport- based 
brewery does. 
 
At a press conference held yesterday afternoon in Freeport to announce the 
expansion, Minister of Grand Bahama Michael Darville said that the investment 
decision by Sands came after discussions between the government and a 
number of Grand Bahama businesses. 
 
“Understanding the potential of this and other proposed expansions on Grand 
Bahama to inject hundreds of millions of dollars into our local economy and 
provide hundreds of permanent jobs for skilled Grand Bahamians and contractors 
on the island, the government held a series of discussions with the principals of 
these companies, as well as other key stakeholders, with a view to reaching an 
amicable solution in the best interest of our island. 
 
“Today, I am happy to report that in exchange for the government’s 
reconsideration of certain 2013 tax increases, The Bahamian Brewery and 
Beverage Company have pledged their commitment to follow through with plans 
to expand their existing facilities. This a testament to the fact that both local 
investor confidence is increasing on Grand Bahama.
 
“I am excited about this multimillion dollar expansion, as it represents an injection 
into the economy of Grand Bahama and the creation of new jobs for Grand 
Bahamians,” said Darville. 
 
While welcomed by some, the government’s decision to roll back certain taxes or 
proposed taxes for particular Grand Bahama businesses has elicited criticism 
from others, who suggested that it was engaging in “divide and conquer” and 
“black mail” tactics by selecting certain major companies to receive tax 
reductions in return for investment commitments while leaving other smaller 
businesses in a position where they are still required to pay the controversial 
increased fees. 
 

 

Created by:Barefoot Marketing
Date created:June 27, 2014