The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sands Beer’s manufacturer has expanded its retail footprint to Abaco via a $500,000 investment in acquiring a Marsh Harbour retailer and adding “at least” three staff.

Jimmy Sands, founder and president of the Bahamian Brewery and Beverage Company, confirmed to Tribune Business that within the last week he had completed the purchase of existing liquor retailer, Tupps Wines, Beers and Spirits.

Disclosing that this would take the Brewery’s wholly-owned retail network to seven, Mr Sands said Tupps would be rebranded as ‘Jimmy’s Wines and Spirits’.

Revealing that the re-opening would take place on October 1, Mr Sands said: “I just bought a business there [Marsh Harbour], and closed the deal a week ago.

“I bought an existing retailer, Tupps Wines and Spirits. It will be rebranded as Jimmy’s Wines and Spirits. I’ll hire additional people up there to run it; at least three for now.”

The Tupps acquisition is the latest move in the Bahamian Brewery and Beverage Company’s efforts to develop a nationwide retail/distribution network for its products, countering the potential ‘lock’ its main rival, BISX-listed Commonwealth Brewery, has on much of the industry through being a vertically integrated company with its own retail subsidiary (Burns House).

Mr Sands was speaking after last week disclosing the potential threat to his company’s business model from the Government’s plans to increase the per liquid gallon tax he pays on domestic beer sales outside Freeport by 75 per cent.

This would slash the $3 tax spread advantage the Bahamian Brewery and Beverage Company holds over Commonwealth Brewery in half, and Mr Sands said the whole decision to invest $27 million in setting up his venture was based on assurances that this margin would be maintained.

Noting that uncertainty over the Government’s tax plans had already forced him to postpone a planned $1 million expansion of the Bahamian Brewery and Beverage Company’s Freeport headquarters, Mr Sands disclosed that other growth proposals would also remain on the drawing board.

“I have other plans on the table, which I’d not like to divulge, but which I’d have to put aside now until I find out what’s going on with this thing,” Mr Sands told Tribune Business.

“I don’t understand how one could manage any company knowing the rules of play exist, and then totally change them in favour of a company [Commonwealth Brewery] that is committed to crushing me.

“Their practices in the past, in terms of lock outs and things, has been horrendous.”

Mr Sands and the Bahamian Brewery and Beverage Company view the $3 tax differential as vital to being able to compete on price with Commonwealth Brewery, which is backed by the capital and other expertise offered by its 75 per cent majority shareholder, global brewing giant Heineken.

The Sands Beer principal told Tribune Business that the ultimate consequences, if the Government went through with its planned tax increases on his firm, would be minimal revenue gain and 
“the loss of a Bahamian company”.

He added: “Edward St George asked me to come up here. I said that if you keep the spread, I might make it work. I had to make sure this brewery was top class and, fortunately, I did.

“I came into Grand Bahama under the rules of play, $1 versus $4 at the time, or a spread of $3. Heineken is trying to get that spread reduced.

“I picked Grand Bahama because I thought I could make it work. I took a big chance on coming here. The reason I came was that, under the rules of play, I had this $3 spread, and now the Government wants to give me a $1.50 spread per liquid gallon.”

Continuous expansion by the Bahamian Brewery and Beverage Company, Mr Sands explained, has been necessary to offset the company’s overheads via top-line growth.

“The cost of production was far greater than I anticipated, and the only way to compensate for that was to increase sales, which is what I’ve been trying to so,” Mr Sands told Tribune Business.

The Bahamian Brewery and Beverage Company’s sales have been enjoying a “slight increase” every year, he added, although the rapid growth once seen ceased after “Commonwealth woke up”.

Acknowledging that sales in Nassau were a “slow, uphill climb”, Mr Sands said the capital was “a very difficult market”.

But he added: “I knew it would be, but I’m a firm believer in slow fire, constant heat.”

Still, Mr Sands argued that the Bahamian Brewery and Beverage Company’s emergence, and the competition it provided, had forced the rival incumbent to reduce its prices - benefiting Bahamian consumers.

If his company became uncompetitive or was forced out of the market, Mr Sands argued that consumers would again suffer because there would be no pricing pressure on Commonwealth Brewery.