Published On:Tuesday, March 09, 2010

By NEIL HARTNELL

Tribune Business Editor

THE Bahamas is one of the few global markets that pays a 50 per cent or greater premium on its beer imports, research has revealed, with this nation's spending on this commodity having grown by an average 5 per cent between 2002 and 2007.

Data produced by CARICOM's Office of Trade Negotiations (the former CARICOM Regional Negotiating Machinery) found that nations on average spend $921 per tonne on beer imports in 2007, yet the Bahamas spend was 55 per cent above this level at $1,431 per tonne.

"In 2007, markets that paid a premium price (over 70 per cent above the global average unit value) for beer products included Canada ($1,667 per tonne), Spain ($5,011 per tonne), Sweden ($1,613 per tonne), Japan ($1,568 per tonne), Brunei ($1,550 per tonne) and the Bahamas ($1,431 per tonne)," the research paper said.

No explanation as to why the Bahamas' imported beer costs were so high was provided, although a likely explanation is likely to be the import duties/Stamp Tax imposed on their entrance at this nation's borders. The most popular imports are Budweiser and Bud Light.

Attempts to obtain an explanation from both Burns House and Bristol Cellars, the nation's two main liquor distributors, proved fruitless, as senior executives were either said to be off the island or did not return calls seeking comment.

Still, Bahamian beer drinkers can take comfort from the fact that most of their favourite brands, namely Guinness, Heineken and Kalik, are brewed at home by Commonwealth Brewery, while Sands beer is manufactured on Grand Bahama.

Nevertheless, the Bahamas was the second greatest importer of beer in the CARICOM region during 2007, its $4.7 million spend standing behind just the $5 million outlay of Barbados.

And between 2003 and 2007, the Bahamas was among "the most dynamic importers" of beer in the region, its annual growth in spending increasing by an average of 5 per cent.

A previous Office of Trade Negotiations report said the Bahamas must increase both goods and services exports to improve its balance of trade and national debt position, as services exports are unable to cover a $2.5-$2.6 billion merchandise trade deficit.

The paper, entitled Export Bulletin: Bahamas, a copy of which has been seen by Tribune Business, said that among the "serious growth challenges" faced by this nation's economy was "an ever expanding international trade deficit", with revenue from export sales still dwarfed by the merchandise trade deficit generated by import spending.

"In 2008, the Bahamian economy spent US$2.6 billion more on merchandise imports (goods) than merchandise exporters earned," the Export Bulletin paper said.

"The Bahamian economy continues to face serious growth challenges, including an ever expanding international trade deficit. The problem of the ballooning trade deficit is compounded by the fact that even with revenue from the services sector, the economy still spends more on imports than it generates from export sales.

"This ultimately has significant implications on international debt, and provides a strong motive for the promotion of viable exports."

The paper noted that the Bahamas' fastest growing export markets between 2004 and 2008 accounted for just 9 per cent of total Bahamian exporter earnings.

Over this period, the fastest growing market for Bahamian exports was China, which produced 725 per cent growth, albeit from probably a low starting point.

Other markets producing strong growth for Bahamian exporters were the Netherlands, with 569 per cent growth; Turks & Caicos at 327 per cent; South Africa, which generated 295 per cent growth; Cuba at 270 per cent; Hong Kong, with 257 per cent growth; Brazil at 219 per cent; Switzerland with 191 per cent; and the Netherlands Antilles and Uruguay, which generated 146 per cent 140 per cent respectively.