Rival urges scrutiny

of Heineken 'deal'

By CHESTER ROBARDS

Business Reporter

crobards@tribunemedia.net

THE Government was yesterday urged by a key Bahamian rival to Commonwealth Brewery/Burns House to closely scrutinise Heineken's proposed purchase of 100 per cent ownership in both entities, demanding that the playing field be kept "level".

Jimmy Sands, owner of Grand Bahama-based Bahamian Brewery, a $15-$20 million investment, said any foreign acquisition of the Burns House Group and Commonwealth Brewery could further bolster their position in the Bahamian market and give them an unfair competitive advantage that could be used to sequeeze out rivals.

However, Mr Sands was optimistic that as an all-Bahamian company, Bahamian Brewery's Sands beer will continue its upward sales trends in the future.

"I'm a 100 per cent Bahamian company," he said. "I don't have any big international company backing me."

Bahamian Brewery's position in Grand Bahama affords it certain tax breaks as a result of the Hawksbill Creek Agreement, driving certain operational costs down, according to Mr Sands. However, he said he pays duties on all the finished beer products - an issue that has been a bugbear for New Providence-based Burns House/Commonwealth Brewery, who have argued that they cannot access the same business/investment benefits.

While up to $20 million was injected into the development of Bahamian Brewery two years ago, the Heineken acquisition could involve a $100 million sum.

The Ducth brewing giant is closing in on purchasing the stakes held by Associated Bahamian Distillers and Brewers (ABDAB), headed by Sir Garet 'Tiger' Finlayson and his family. ABDAB holds a 47 per cent stake in Commonwealth Brewery, and a majority 78.8 per cent stake in the Burns House Group. Many observers of the deal suggested it was being driven by the financial woes being experienced by Solomon's Mines, the troubled luxury goods retailer that the Finlaysons acquired in 2004 via ABDAB's Bethell-Robertson affiliate. However, sources close to the ABDAB side suggested it was nothing more than "prudent estate planning" by Sir Garet. Mr Sands said he was concerned about the transparency of the Heineken buyout, but added that the deal should go through once it is within the "bounds of the law".

Adding that he was not opposed to the deal if this was the case, Mr Sands said of the local beer market: "I don't want it all. "I just want a piece of it. The beauty of my business is that all the equipment is the highest standard equipment and it is made by Bahamians."

Mr Sands added that many businesses that serve alcohol have switched to Sands as their primary beer, and he hoped many others do the same. He added that Grand Bahama was the place for his kind of business, alluding to the ease with which shipping and licensing is done, as well as the infrastructure. "I wish more people would venture into manufacturing here," said Mr Sands. "They should take advantage of it."

Published On:Wednesday, February 03, 2010