The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s owner fears that import tariff reductions demanded as part of the Bahamas’ World Trade Organisation (WTO) entry may force him to stop manufacturing the supermarket chain’s ‘own brand’ bathroom tissue, and send 20-30 factory workers home.

Rupert Roberts told Tribune Business that he “can’t see manufacturing surviving” in the Bahamas if the Government lowers duty rates on rival imports as part of the WTO accession process and wider tax reforms.

Looking beyond immediate concerns relating to the Government’s Value-Added Tax (VAT) plans, Mr Roberts said: “There are other problems.

“We manufacture our own paper, bathroom towels. We do a massive volume, and when you take the duty off for WTO, then we’re not competitive.

“We might as well bring the product in cheaper from the US, close the factors and send the workers home.”

Mr Roberts said between 20-30 workers were employed at Super Value’s bathroom tissue/towel manufacturing facility, and he told this newspaper that he had asked his manager to call the Government and see when it would meet with the manufacturers.

“I can’t see what little manufacturing we have, I can’t see it surviving, but perhaps I’m not the sharpest tool in the shed. Maybe the Ministry of Finance know more than me,” the Super Value president said to Tribune Business.

He added that the Super Value ‘own brand’ was the chain’s “leading bathroom tissue” in terms of that category’s sales.

“Super Value tissue is the fastest seller of all the brands,” Mr Roberts said. “It’s our lead paper. We sell more Super Value bathroom tissue than all of the other bathroom tissues put together.”

Emphasising that closing the company’s manufacturing facility was the last thing on his mind, Mr Roberts told Tribune Business: “I hope not.

“It’s another love of life. I’d do anything to avoid that happening.”

As part of its wider tax reform plans, the Government is pledging to slash a wide range of tariffs to make way for VAT’s implementation, ensuring that the new tax has a ‘revenue neutral’ effect and does not raise rates for business owners.

However, it has yet to release the revised Tariff Schedule showing how VAT will impact existing Customs/import duty rates, and what companies will now have to pay.

And running parallel to the VAT reforms is the Bahamas’ accession to full WTO membership, which requires this nation to ultimately either eliminate - or drastically reduce - many import duty rates.

Mr Roberts’ concerns over the dual VAT/WTO impacts on manufacturing add to those contained in the Bahamas Trade Commission’s Manufacturing Sub-Committee report.

As revealed by Tribune Business earlier this year, the report said manufacturing “cannot survive” as an industry in the Bahamas without protective tariffs as high as 200 per cent.

The Manufacturing Sub-Committee report detailed a ‘protective tariff’ wish list requested by different manufacturing sectors, with the industry “unanimously” agreeing such measures are essential to its survival in a trade liberalization environment.

The sub-committee, chaired by Andrew Rogers, head of Bahamas Aluminium Manufacturing and Nassau Glass Company, had sought input from manufacturers on their key concerns over the Bahamas’ accession to full membership in the World Trade Organisation (WTO).

“Taking everything into consideration, by far and large the most important concern to all local manufacturers is the implementation of protective tariffs with all foreign trade agreements,” the sub-committee’s report said.

“It was unanimously agreed that without proper protective tariffs, the manufacturing sector in our country cannot survive.”

Asked what tariff rates should be set for their protection, industry responses varied from uniforms and chicken products except leg quarters (50 per cent) to ice (200 per cent). Drinking water companies sought tariff rates on imported rivals ranging from 72 per cent to 150 per cent, while food processors, bedding manufacturers, concrete block makers, sail and awning manufacturers, and automotive and marine battery manufacturers all wanted 100 per cent tariffs.

Other sectors seeking high tariff rates were makers of rubbing alcohol, cleaners and auto coolant (150 per cent), with cleaning chemicals and pipe manufacturers also wanting import duties as high as this.

It is unclear whether the Bahamas will be able to obtain all the tariff rates sought in this ‘wish list’ at the WTO, although all nations are able to secure ‘carve outs’ and exemptions from certain industries. Much may depend on the skill of Bahamian negotiators, with private sector support, as rules-based trading regimes view import tariffs as barriers to trade, and automatically demand that they either be eliminated or significantly reduced.