strategy, which could more than double its workforce via the creation of “over
Tribune Business that the decision to proceed with the $2 million ‘first phase’
Sands said it would add 15 jobs, taking the company’s workforce to 85-strong.
last 2014-2015 Budget, did not alter the tax differential that we currently have,”
“To show good faith, I decided I would go ahead with this expansion. We have
the differential will be maintained year after year.
“I can’t be going through this ‘don’t know what’s happening tomorrow’. To
show good faith, we’re going ahead with this expansion,” he added.
“We’ll add 15 jobs. Right now, we have 70, and that will take us up to 85.”
Mr Sands said he “anticipated” creating more than 100 new jobs and “more
than doubling the workforce” if we he was able to execute on his full $15
“The Brewery wishes to embark upon an additional $13-$15 million worth of
expansion and growth over the next five to ten years, and looks forward to
signing an agreement with the Government to ensure that it is allowed to enjoy
at least the same tax benefits against its competition as was enjoyed by
Commonwealth Brewery in relation to imported beers,” he added.
Tribune Business exclusively revealed last year how the Bahamian Brewery &
Beverage Company had been forced into a last-minute postponement of its
planned first phase expansion, amid fears it would have to “shrink drastically”
given government plans to impose a 75 per cent increase in its tax burden.
Ministry of Finance officials at that time wanted to increase the duty Mr
Sands’s company paid on domestic beer sales from $2 per liquid gallon to
This, Mr Sands said at the time, would have slashed the ‘duty spread’
advantage the Bahamian Brewery & Beverage Company enjoyed over its
main rival, BISX-listed Commonwealth Brewery, by 50 per cent.
Commonwealth Brewery was paying $5 in duty per liquid gallon, but Mr Sands
said it did not incur the shipping costs his firm did in getting product to the
And, backed by the deep pockets and economies of scale provided by its 75
per cent majority shareholder, global brewing giant Heineken, he argued that
the Bahamian Brewery’s main rival enjoyed distinct competitive advantages
that could put his firm out of business.
Now, with the expansion back on, the Bahamian Brewery & Beverage is
effectively ‘dipping its toe in the water’, proving it will hold up its end of the
bargain and deliver on its investment commitments, provided the Government
does the same.
It is also the first Freeport manufacturer to publicly unveil job-creating
expansion plans, an ironic development given that Prime Minister Perry
Christie touted only foreign-owned industrial concerns when unveiling his tax
roll-back. The Bahamian Brewery & Beverage Company is 100 per cent
Mr Sands yesterday said the brewery had signed a contract with Freeport
Construction for the expansion, with the necessary building materials already
“We hope to have it completed by early fall, November at the latest,” he told
Tribune Business, indicating that the need for extra production capacity and
storage had also motivated the expansion.
“We’re up to full capacity now, and it will give us added volume,” Mr Sands
said. “It will give us a 20 per cent increase in productivity and storage.
“I feel confident in terms of the negotiations we’ve been having with the
Government. At least we’ve been in dialogue with one another, whereas in the
past they’d just slam it down my throat and I’d have to scramble.
“They talk about this level playing field, but all I wanted was an equal
opportunity and the fair chance that Commonwealth Brewery enjoyed for 20
years. At least give a Bahamian a chance. The main thing is that I just want an
equal opportunity to grow this Bahamian company.”
That is a reference to the $8 tax advantage that Commonwealth Brewery
enjoyed over foreign/imported beers for 20 years, and Mr Sands said his
company could only survive through similarly favourable tax treatment.
“It’s vital,” he told Tribune Business. “If that is removed, we’ll be out of
business tomorrow, and we’ll go back to a monopolistic industry in wines and
spirits. We’ll create a monopoly again, and monopolies are not healthy.”
The current $2 million investment represents the Bahamian Brewery &
Beverage Company’s third expansion since it started operations in 2007, and
Tribune Business calculations suggest Mr Sands and his fellow investors will
have ultimately invested around $42 million if they go through with their full
$15 million growth plan.
Mr Sands confirmed that the investment would “be close to $40 million”, and
described his expansion plans as “almost like a breathe of fresh air”.