Price hike

Barbadians will pay more for Mount Gay rum from next year.

Managing Director Mount Gay Distilleries Ltd Raphaël Grisoni disclosed on Wednesday that the price will have to increase as the company cannot continue to swallow the rising costs associated with more expensive inputs and logistical challenges.

He was unable to say by how much the cost of Mount Gay products would increase but said it would affect both the local and export markets sometime in 2023.

“I don’t have any figures right now, but what we do is try to absorb the maximum. But you can be sure that with the trend we are observing right now that next year we will have to increase our prices for sure. There is no doubt about that,” said Grisoni.

“Mount Gay is not acting in isolation; we are just part of a trend. So other brands of all kinds of [alcoholic] products will also increase,” added Grisoni who was responding to questions from the media following a tour of the company’s St Lucy location, where he announced an investment in a sugar mill and a new rum aging bond.

Earlier this year, some popular spirit producers around the world said their products would attract higher prices as they struggled to keep absorbing rising costs which had been compounded by freight disruptions.

Grisoni said Mount Gay had been trying its best to deal with the effects of ongoing freight delays and the effects of the war in Ukraine by being agile, adaptive, and forecasting.

However, he said, it had not been able to entirely escape the effects.

“When we have a good forecast we can plan way in advance what will be the future needs,” the Mount Gay official said.

“Unfortunately, consumers are going to be impacted at the end of the day [because of] inflation – inflation [on the cost] of all raw materials, inflation on the logistics cost which is tremendous. We are supporting it and we are trying as much as we can when we are exporting to our key markets [not] to pass on this price increase.”

Grisoni said he was not overly concerned about a decrease in the consumption of Mount Gay rum as a result of the pending price increase.

In fact, he explained that should there be a reduction in local consumption, the company was still banking on exports.

“You need to buy your necessary goods like food, effectively [impacting] the share allocated to what is not necessary, and if rum is not necessary in your life, probably it will have an impact in

terms of consumption. It is why export is so important and diversification of the countries to where we are exporting,” Grisoni said.

“So, in a way, we are diversifying the risk. So instead of being

dependent on one or two big countries, we are trying to export to many countries so that the risk is diluted in a way.”

Grisoni added that Mount Gay might be able to tap into the luxury goods model.

“The good thing that we notice is that there is a model we try to copy, which is the luxury goods model where effectively sometimes the more the prices increase there is more demand. I am not saying it will happen with rum, but we don’t have to fear the price increase because what we are proposing is a high-value-added product and consumers right now are looking

for this kind of product.

“So maybe the overall consumption is going to decline in terms of alcohol but . . . . we think that consumers will drink less but probably better. With our beautiful rums I am sure that we will be a great choice for those consumers,” he said.

marlonmadden@barbadostoday.bb