The new taxes announced recently by Prime Minister and Minister of Finance Mia Mottley in her $1.2 billion austerity Budget are expected to hit the profits of Barbados’ main rum producer.
While Mount Gay Distilleries Ltd is yet to determine the extent of the impact, Managing Director Raphaël Grisoni said with water, energy and molasses being three of most heavily used items in the production of rum, the company would certainly be impacted “in all aspects”.
“Right now we are assessing what could be the impact. You are right to say the one on diesel in particular is one that is affecting us for the distribution of our rum,” Grisoni said recently on the sidelines of the company’s third annual We Care Day at Brandons Beach.
“In a couple of weeks we will have a clearer picture of what could be the financial burden of the company,” he added.
In the June 11 mini Budget, Mottley announced a tax of 40 cents per litre on diesel and gasoline effective July 1, which will replace the road tax, and a Garbage and Sewage Contribution (GSC) fee of 50 per cent of the water bills of businesses, effective August 1. The GSC for households is $1.50 per day.
Despite the anticipated increases in cost, Grisoni said Mount Gay, which was acquired by French alcoholic beverage company Rémy Cointreau last year in a multi-million dollar deal, was focusing on water conservation, which he believed would lessen the likely impact of the GSC on the rum factory.
“The good thing is that we started an initiative at Mount Gay to save water, to recycle water, to collect water. As part of the listed company in France we are obligated to show that we are conscious about [water conservation]. Water is scarce and specifically in Barbados and we need to pay attention to that and we have a certain number of initiatives to ensure we are reducing our water consumption,” Grisoni said, going on to reveal the rum producer has recorded a 15 per cent decline in water use since the water saving scheme began a year ago.
“It is by small initiatives, by collecting the rain water, recycling the water, and small day-to-day gestures like when the tap is leaking we fix it, all these small things at the end of the day are sizeable for a company like Mount Gay. So we need to continue this kind of initiative and make sure that the new tax is impacting less,” he said.
Grisoni welcomed the removal of the burdensome National Social Responsibility Levy, which he said had resulted in a decline in the spending power of Barbadians over the last couple of years.
He explained that while the NSRL did not directly impact his operations, the reduction in spending power meant fewer Mount Gay products were also being sold.
Mount Gay has selected Brandons Beach for a bit of care and love by repainting the bathroom facilities and benches and erecting new signage.
More than 150 people carried out more than four hours of work on the beach for what Grisoni said was “only a drop in the ocean in terms of the care” that Barbados needed.
“I think we need this kind of initiative, which is coming mainly from the heart and not necessarily coming from the pocket. I think every company can do that easily, allocating a few hours to give back to the community. If every company or neighbourhood is doing that I think all those drops can make a significant amount of water and make a difference,” he said. email@example.com