Back in the 1970s, our own Richard Stoute had a hit song that opened with the touching words “Sogoodbye now, my Bajan girl. I hope to see you some day”.
From how things are panning out, it seems Barbados could pretty well soon be singing “So goodbye now, my Bajan Banks”, as the possibility has increased over the past week that full ownership of the local brewery and beverage conglomerate could end up in foreign hands.
Banks Holdings Ltd (BHL), parent company of three subsidiaries that produce Banks beer, soft drinks and the popular Pine Hill Dairy range of products, is the current target of a takeover bid by two foreign entities –– the St Lucian-based SLU Beverages Ltd and the Trinidadian-based ANSA McAl Group.
While Stoute sang with the confident hope of seeing his Bajan girl sometime again in the future, it is unlikely, however, that Barbados will ever see significant ownership of Banks falling back into local hands if control passes to foreign interests. Therefore, it is more likely to be “adieu” –– “goodbye forever” –– to quote the French, instead of “au revoir”, meaning “see you again”.
Both SLU Beverages Ltd, which became the single largest shareholder in Banks sometime ago, and the ANSA McAl Group already have substantial interests in the beer and beverage industry with the well-known Presidente and Carib beer brands respectively. Hence, there is reasonable concern that a takeover in either case could lead eventually to the demise of the Banks beer brand which, like flying fish, is a symbol of Barbados.
It was on these grounds that a group of concerned BHL shareholders initially came out against the offer from SLU Beverages after a senior executive of AmBev SA, the parent company, suggested that a Banks takeover could be used as a platform for pushing Presidente beer. In the case of ANSA McAl which has provided fierce competition for Banks in the local market for several years, Carib, its flagship beer, is marketed as the Beer Of The Caribbean.
If Banks has such sentimental value to Barbados, as some are contending, why then are Barbadian interests not lining up with their own offers to take over the company to ensure it remains in local hands, especially given the outcry in recent years over ownership of key local assets passing into foreign hands? In our open market, Barbadians are just as free as foreign interests to put in a bid.
Ruling out the likelihood of his company making a bid, leading entrepreneur Ralph “Bizzy” Williams told Barbados TODAY yesterday that the reluctance of Barbadians to invest stemmed from our being “risk-averse”. There is another reason too.
Our major companies, by and large, are trading entities which are happy making money from buying and selling, instead of investing in the production of goods where there is much greater risk.
Effectively addressing the risk-averse nature of Barbadians requires a fundamental change of mindset. Otherwise, more local assets will fall into foreign hands while Barbadian money remains safely tucked away in commercial bank deposits. At the same time, though, one must be cognizant of the fact that many ordinary Barbadians who took the risk and invested, ended up being burnt. In some cases, they lost their life savings.
Even when SLU Beverages became the single largest shareholder in Banks some time ago, some concern was expressed about how this was done and the undermining effect on small investors. Human nature is such that once bitten, twice shy.
If small investors believe they are nothing more than helpless players in a power game where large shareholders have the clout to do as they wish, it is going to be difficult to change the reluctance of the average Barbadian to invest in companies.
Yet, Barbados needs to nurture an investing culture, especially to take advantage of opportunities within the region under the Caribbean Single Market and Economy (CSME) and beyond. An investing culture can only be built on a foundation of confidence, resulting from the creation of an enabling environment through the adoption of an appropriate policy framework.
It is in this critical area where Government intervention can make a difference in support of national development.