The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A TRINIDAD conglomerate, with extensive liquor, brewing and drinks manufacturing interests, has obtained all necessary regulatory approvals to acquire a “minority interest” in Freeport-based Bahamian Brewery and Beverage Company.

ANSA McAL, which owns Carib Brewery, producer of the Carib and Stag beers, confirmed the deal had received exchange control approval from the Central Bank of The Bahamas on April 21, 2023, which represented the last regulatory obstacle to the transaction proceeding.

Few details were provided in the ANSA McAL announcement to the Trinidad and Tobago Stock Exchange, which it was obligated to make as a publicly listed and traded company. “On November 14, 2022, ANSA McAL entered into a definitive share purchase agreement under which ANSA will acquire a minority interest in the Bahamian Brewery and Beverage Company,” the statement said.

“On April 21, 2023, ANSA received final regulatory approval from the Central Bank of The Bahamas to proceed with the acquisition of an equity interest in Bahamian Brewery and Beverage Company. Accordingly, all regulatory approvals for the above transaction have now been obtained.

The terms of the deal, including the size of the equity stake being acquired by ANSA McAL and the purchase price, were not disclosed. Jimmy Sands, the Bahamian Brewery and Beverage Company’s principal, did not respond to Tribune Business calls and messages seeking comment. However, the deal with ANSA McAL appears on the surface to make sense for both parties for multiple reasons.

ANSA McAL will likely receive at least one Board seat in return for its equity capital investment, the proceeds of which could be put to use by Bahamian Brewery and Beverage Company for further expansion or upgrades to its manufacturing plant, retail facilities and distribution network.

The Freeport-based brewer of Sands, Sands Light, Strong Back Stout, High Rock Lager, Bush Crack Beer and Triple B Malt has also obtained a partner with deep financial pockets that can help serve as a counter-weight to its main Bahamian rival, BISX-listed Commonwealth Brewery in Nassau, which has always been able to draw on the strength of its 75 percent majority shareholder, international brewing giant, Heineken.

ANSA McAL’s ownership of Carib Brewery will also enable Bahamian Brewery & Beverage company, which is the local distributor for Budweiser and the Anheuser Busch brands, to exploit potential synergies and tie-ups with its new minority partner, as well as to tap into its drinks and brewing industry experience and expertise.

Carib Brewery has extensive interests in Florida, having acquired that state’s then-third largest brewery, Indian River Brewery, in 2016, which it followed up a year later by purchasing the Florida Beer Company. Bahamian Brewery and Beverage Company could thus leverage ANSA McAL’s existing network infrastructure to export Sands and its other locally-made brands to Florida and throughout the Caribbean - a move it is being urged to undertake.

ANSA McAL, in return, has gained access to the Bahamian brewing, liquor and drinks market and could, over time, expand its interest and involvement. It is not uncommon for Caribbean drinks manufacturers and brewers to take minority equity stakes in Bahamian firms, as this happened with Banks Breweries Barbados when it bought into Caribbean Bottling Company, the local Coca-Cola producer.

The ANSA McAL deal was agreed almost six months after the Government, in the 2022-2023 Budget, created a “level playing field” among Bahamian beer manufacturers that eliminated the tax advantage that Bahamian Brewery and Beverage Company had long enjoyed over its BISX-listed rival.

Changes to the Spirits and Beer Manufacture Act saw the Government ensure all beer manufacturers - Commonwealth Brewery, the Bahamian Brewery and Beverage Company and various micro breweries - pay the same standard tax rate of $2.50 per liquid gallon.

This involved slashing Commonwealth Brewery’s tax rate, previously pegged at $5 per liquid gallon, by 50 percent. And the Bahamian Brewery and Beverage Company, which also enjoys the incentives provided under the Hawksbill Creek Agreement, saw its tax rate increased by 25 percent from the present $2 to bring it the uniform $2.50 per liquid gallon rate.

Bahamian Brewery and Beverage Company had long argued that the preferential tax treatment it enjoyed was critical to maintaining its competitiveness against Commonwealth Brewery. It had previously lobbied hard - and successfully - to persuade the last Christie administration to reverse course on such reforms and preserve its former $3 per liquid gallon of beer tax advantage over its BISX-listed rival.