CARICOM rum producers are about to face a battle against orchestrated initiatives to increase taxes on imported glass bottles. They maintain that these changes could make importing glass bottles more expensive for them and a number of other players in the manufacturing sector, including small entrepreneurs, and therefore reduce the competitiveness of manufacturers across the entire region.
Spearheaded by the Caribbean Private Sector Organisation (CPSO), the initiatives were presented to Caricom Trade Ministers as a way of promoting regional production of glass bottles.
“But” says Komal Samaroo, Chairman of WIRSPA and head of the Guyanese conglomerate, Demerara Distillers “We’re concerned that the move to increase taxes will facilitate the formation of a monopoly situation where the supply of bottles to the market will be controlled by the sole regional supplier of glass bottles. There is a real danger that for export products, this could cause a relocation of value-added bottling operations overseas and the loss of regional jobs.”
Added Samaroo, “The irony of this proposal is that we as an industry are already buying all the glass packaging the Trinidad-based regional supplier is able to supply, and several producers have had to resort to importing glass because that supplier cannot meet demand, or because of quality problems. Additionally, as an export-oriented industry operating at the premium and super-premium end of the market, we require bespoke and unique designs for our bottles in order to remain competitive”.
The rum producers have confirmed that they already do significant business with the Ansa McAl owned glass supplier but have been forced to import standard glass bottles due to an inability of the regional supplier to meet orders in a timely fashion. The position of the rum industry is also supported by the other large users of glass in the region, including the beer and soft drink industries, which all together employ thousands of workers across their operations.
“The problem is not just with the big users”, says Samaroo, “many, many large and small entrepreneurs in the fast-growing prepared foods industry, the sauces, condiments, jams and jellies manufacturers, especially those seeking to enter the niche export markets, would struggle to cope with additional costs for glass packaging at this time.” Samaroo added,” We’ve made our concerns known to regional governments, and we’re happy to report that they seem to be taking account of the potential negative implication of the proposals, not just for rum, but for their entire manufacturing sector”.
Alongside this issue, rum producers also discussed developments in the industry, in particular ongoing supply chain challenges and rising prices of critical inputs such as molasses, which have been exacerbated by the conflict in Ukraine.