The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An “elated” Bahamian Brewery and Beverage Company founder was yesterday celebrating his coup in seizing the Bahamian distribution contract for Budweiser and all brands produced by Anheuser-Busch from his major rival.

Jimmy Sands confirmed that the Freeport-based brewery was set to end Commonwealth Brewery’s four decade reign as the Bahamian distributor for the brands produced by the world’s largest brewery.

“The distribution is coming to us. I picked it up. I’ve been after that for years,” Mr Sands told Tribune Business in a brief interview.

“We’re very elated about it. It’s [Anheuser-Busch] the biggest brewery in the world. That’s a giant powerhouse.

“To believe an island boy such as myself has been awarded the distribution for Anheuser-Busch, it’s very pleasing, and I’m glad to be the distributor. Most importantly, a Bahamian will be the distributor.”

Mr Sands declined to go into detail on the move, and how big a boost it would be to his company’s financials, revenue and market share, other than to confirm that Budweiser and its fellow Anheuser-Busch brands would be distributed by Bahamian Brewery and Beverage Company and its Jimmy’s Wines and Spirits retail affiliate.

He indicated it would be premature to comment further, due to the fact that specific details - including the transition from Commonwealth Brewery to his company - were still being worked out.

Mr Sands, though, said he hoped to take over the Anheuser-Busch distribution contract for the Bahamas this month.

One explanation for the move may lie in the slightly ‘spiky’ press release from Commonwealth Brewery announcing the distribution switch, which said the BISX-listed company was “assessing its legal position” in relation to the move.

This indicates that Commonwealth Brewery, which is 75 per cent majority-owned by Heineken, Anheuser-Busch’s biggest global rival, has at least asked its attorneys to examine whether it has legal recourse over the loss of the distribution contract.

“Commonwealth Brewery today announced that its subsidiary, Burns House Ltd, has received notice of termination of its long-standing distribution agreement with Cerveceria Nacional Dominicana (CND) and Anheuser-Busch InBev N.V. (ABInBev),” read the company’s press statement.

“Through the existing arrangement, Commonwealth Brewery has been distributing the Budweiser brand and a few other ABInBev brands in the Bahamas for the last four decades.”

It added: “Commonwealth Brewery is currently assessing its legal position, but has every intention to agree a fair and orderly transition which recognises, amongst other important considerations, the decades’ long investments made by the company to build the brand franchise of the ABInBev brands in the Bahamas. We are also currently determining the finer details of the transition, such as timing.

“Until further notice Commonwealth Brewery will continue to distribute as normal and, with the same high standards, the portfolio as it has been marketing to date.”

Hans Neven, Commonwealth Brewery’s managing director, did not return a detailed Tribune Business phone message left with his office seeking comment.

However, a well-placed source familiar with developments, speaking on condition of anonymity because they were not authorised to speak for Commonwealth Brewery, conceded that the loss of the Anheuser-Busch contract would be “significant”.

However, they said the move had been in the works “for the last six months or so”, and that the BISX-listed brewer was already working on plans to compensate for the lost business.

“It’s going to be significant, but it’s not going to be immediate,” the source said of the distribution contract loss’s impact.

“We’re working on some things, and I think we’ll be able to compensate over maybe the next year or two years for the loss of the relationship with that.”

The contact professed not to know where Anheuser-Busch was switching the Bahamian distribution contract to, although they hinted it was being picked up by Mr Sands and his Bahamian Brewery and Beverage Company.

They described the change as simply “a new strategy” for Anheuser-Busch in its approach to the Bahamian market.

However, the distribution loss is likely to further inflame, and intensify, the ‘brewing’ battle between the foreign-owned, BISX-listed Commonwealth Brewery which has a decades-long presence in the Bahamas, and Mr Sands and his ‘upstart’ Freeport-based rival, which has grown rapidly during its decade in existence.

Relations between the two sides have not been warm in recent years, with the Bahamian Brewery and Beverage Company successfully fighting to keep the ‘duty spread’ advantage it enjoys over its more established competitor.

The Bahamian Brewery and Beverage Company currently pays $2 per liquid gallon, with Commonwealth Brewery is paying $5 in duty per liquid gallon.

The latter is thought to have lobbied the Government to equalise the duty rates, but Mr Sands argues that maintaining the existing $3 tax ‘spread’ is vital to the Bahamian Brewery and Beverage Company’s survival.

He also previously accused Commonwealth Brewery’s vertically-integrated brewing, wholesale and retail operation of anti-competitive practices by forcing retailers to sign contracts with either eliminated, or marginalised, the placement of Sands beer and other brands in their stores.

When questioned about this previously, Nico Pinotsis, Commonwealth Brewery’s former managing director, declined to comment.