The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Commonwealth Brewery has urged the Government to create a fiscal reform ‘level playing field’ that prevents the Bahamas from becoming “a dumping ground” for cheap alcohol imports.

Nico Pinotsis, the BISX-listed brewer’s managing director, writing in its 2013 annual report, warned that the company would face a “significant” impact if Value-Added Tax (VAT) or any other reform option proved inflationary.

Acknowledging that it was impossible for companies to properly plan given the ongoing uncertainty surrounding the Christie administration’s fiscal reform options, Mr Pinotsis said: “If these changes generate a large inflationary effect, the impact on Commonwealth Brewery is likely to be significant.

“It is also paramount that in this fiscal reform, the playing field needs to remain level, not in the least to avoid the Bahamas becoming a dumping ground for cheap imported products that jeopardise our competitiveness and hence survival as a local manufacturer.

“We will continue our dialogue with Government in order to safeguard our interests in this matter.”

Still, Mr Pinotsis, who has previously expressed to Tribune Business his concerns over an increase in smuggled alcohol imports, pledged “to defend our position in the market as supplier of choice”.

He added: “We will need to continue to earn brand preference among consumers and win new customers.

“For 2014, a number of product innovations have been slated, both through extensions of our existing brands as well as through introductions of new brands. We will also continue with the gradual upgrade of our best located retail stores.”

Echoing his managing director, Commonwealth Brewery’s chairman, Julian Francis, added: “The near-term outlook will much depend on what we can expect from the financial reforms as announced to take place in 2014, and the possibility of operating on a level playing field after these reforms are introduced, where all in the industry pay taxes, duties and fees at comparable rates, with offenders being appropriately penalised.”

Commonwealth Brewery, which is 25 per cent owned by 3,000 Bahamian investors, the majority 75 per cent controlling interest remaining in the hands of international brewing giant, Heineken, had to contend with a weak economy and reduction in stopover visitors in 2013.

Still, Mr Pinotsis said the brewer had managed to reduce its electricity and water consumption per hectolitre (hl) of beer produced in the Bahamas, with its bottle return rate growing to 60 per cent.

“By continuously focusing on adherence to safety policies and procedures, we reduced the number of accidents in our Brewery by 33 per cent, from nine to six in 2013,” Mr Pinotsis said.

“Although the numbers are low, our target will remain set at zero accidents, as every accident is one too many. As of 2013 we have been reporting accidents not only at the Brewery but company wide.” The accidents led to a total loss of 76 working days.

Analysing its sustainability performance for 2013, Commonwealth Brewery said: “While thermal consumption was reduced in 2013, electrical consumption increased. However, overall energy consumption (thermal and electrical) continues to trend downward from 262.5 MJ/hl in 2011 to 234.6 MJ/hl in 2012 to 230.1 MJ/hl in 2013.

“Continued focus on reducing consumption (evaporation rates in brewing) as well as investment in more efficient electro motors lead to a 1.9 per cent reduction of overall energy consumption in 2013 versus the previous year.”

Water consumption fell from 5.9 hl/hl in 2012 to 5.8 hl/hl in 2013, while non-recycled industrial waste was reduced from 4.3 kilograms/ hl in 2012 to 3 kilograms/hl in 2013.