The Tribune

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net KENTUCKY Fried Chicken (KFC) Nassau yesterday warned its survival hinged on renegotiating a reduced wages and benefits package for its line staff, saying this was "more than double" the industry average and making the company uncompetitive against ever-increasing competition. In a statement, KFC Nassau Restaurants (Bahamas), part of the George Myers-headed Myers Group, said it had to "get its cost structure in line with the rest of the fast food industry' in order to save the ailing business". Outlining the company's financial predicament and current state of negotiations with the Bahamas Hotel, Catering and Allied Workers Union (BHCAWU), KFC executives declined to comment further on the matter when contacted by Tribune Business yesterday. The company disclosed it had to secure additional financing to maintain its operations, although it was not clear whether this was equity or debt. "We have been facing some tough times. With the downturn brought by the global recession, the Bahamian economy has been hard hit," its general manager, Gabriel Sastre said. "We have all had to face increases in costs, which is a challenge for us all, including KFC. Our customers are also finding it difficult and have let us know that our prices are too high by not only complaining to us directly on Facebook and via customer focus group feedback, but also by their decision to start shopping elsewhere. "The wage and benefits package that KFC carries is as a result of a union-negotiated labour contract that dates back to the earliest days of the company's presence in the Bahamas. The existing labour contract imposes staffing arrangements that the competition does not have to deal with - a wage and benefits package that accounts for a significant percentage of total expenses." KFC said that while the company is subject to the same operating costs as its competitors, its wage and benefits package is more than two times' higher, describing this as "unsustainable" and must be reduced in the new industrial agreement. It said it was "operating at a great disadvantage" as a result. Noting that its rate of staff turnover was much less than at rivals, with the average employee tenure approaching 10 years, KFC said that with revenues falling and costs rising: "To remain viable, the company must adjust its compensation in line with the norms of the sector and will seek to renegotiate the wage and benefit package in the new industrial agreement." KFC has been in Nassau for 27 years, but its market share has been hit hard in recent years, from competition from homegrown Bahamian chicken specialists such as Bamboo Shack. The industrial agreement between KFC Nassau, Restaurants (Bahamas) and the BHCAWU expired on September 24. KFC claims that as no proposal was received from the union prior to the expiration of the industrial agreement. The company submitted a new five-year industrial agreement proposal to the union on October 10, 2011. It said there was no response from the union to its October 10 proposal, and that three weeks later the company sought to advance the matter, requesting to meet with the union on November 9 to begin negotiations. "The company was told that this date was not convenient and no alternative date was suggested. Accordingly, KFC suggested meetings during the following week," the company said. "In response, the union said they would send their own proposal on November 29, and suggested meeting in early January 2012. "KFC said that was unacceptable and insisted on meeting no later than November 30, explaining that after that date the company would have to resort to cost cutting measures." KFC said it was "willing and anxious" to enter negotiations with the union in good faith at the earliest possible date, is hoping for a new agreement in the shortest possible time. Calls to BHCAWU president Nicole martin were not returned up to press time.