The Tribune

By NATARIO McKENZIE

Tribune Business

Reporter

nmckenzie@tribunemedia.net

PRIME Minister Perry Christie yesterday said the Government was not close to making a final decision on the potential acquisition of Bahamas Food Services (BFS) by the multi-billion dollar US food distribution giant, Sysco, telling Tribune Business his administratio was having detailed discussions with rival Bahamian wholesalers on the deal’s likely impact.

Confirming that Sysco’s purchase of BFS, as first revealed last week by this newspaper, was in the works, Mr Christie said: “Applications have been made with respect to that. The Government has had detailed discussions with wholesalers up to yesterday (Monday), and we are continuing to consult moving forward.

“It is a matter of a decision to be made. We are not near that.  We are consulting and it is what it is.”

  Acknowledging that Sysco had expressed interest in BFS before in 2004-2005, Mr Christie added: “This happened before during my term, when another application was made, and so it is a process going on.

“BFS is owned 100 per cent by a foreign entity, so the question is one foreign group selling to one foreign group, and whether or not the size and  the scale of the operations of Sysco represents a threat to wholesalers here in the Bahamas, notwithstanding the fact that a lot of the things that BFS does, the wholesalers here do not do.

“It’s a judgement call that we have to make, and we hope to make it with the knowledge and support as best we can with those persons who are stakeholders.”

  Sysco had initially expressed interest in BFS back in 2004-2005. The initial deal, which was mulled under the first Christie administration,never came to fruition, partly because the Government was reluctant to grant approval for it in an industry supposedly reserved for 100 per cent Bahamian ownership only.

Sysco boasts of sales and service relationships with approximately 400,000 customers, operating from more than 180 locations throughout the US, Canada and Ireland.

BFS, formerly known as Island Seafood (ISF), has been operating in the Bahamas since 1971. The company which employs some 300 Bahamians and offers more than 9,000 product lines, is owned by the Frisch family out of Jacksonville, Florida. The same family controls the parent, Beaver Street Fisheries.

BFS operates from a 160,000 square foot facility, located on 20 acres, off Gladstone Road. It has room for expansion, and also has its Tropic Seafood fisheries export arm. It is also the leading food supplier to the Bahamian hotel, restaurant and retail industry.

  The potential arrival of Sysco could prove challenging for Bahamian wholesale industry rivals, who would fear Sysco’s market power could pose a competitive threat that drives them out of business.

Patrick Treco, managing director of Continental Foods, told Tribune Business that if a deal between Sysco and BFS were to happen, it could be detrimental to rival Bahamian wholesalers who could be “undercut” on price.

But Phil Lightbourne, head of Phil’s Food Services, last week backed any takeover by Sysco, a New York Stock Exchange (NYSE) listed company with $37 billion in annual sales.

He said it would benefit both Bahamian consumers and small food retailers.

Suggesting that only BFS, with the backing of someone like Sysco, would be able to meet the demands of both Atlantis and Baha Mar when the latter opened, Mr Lightbourne said Sysco’s product offering and purchasing power would reduce prices in the Bahamas. And he added that Sysco was also prepared to offer Bahamians shares via a Bahamian Depository Receipt (BDR) offering.By NATARIO McKENZIE

Tribune Business

Reporter

nmckenzie@tribunemedia.net