0

Jamaican Firm Takes 60% Of Food Distributor

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A publicly-traded Jamaican firm is "realising remarkable growth" upon entering the Bahamian food distribution market via its acquisition of a 60 percent majority stake in a local wholesaler.

Everything Fresh Jamaica, in an October 16, 2020, statement to its shareholders and that country's stock exchange revealed that it had received all necessary regulatory approvals to cement its control of its Bahamian subsidiary.

The identity of the Bahamian company it acquired has not been disclosed to either its shareholders or the Jamaican media. However, research by Tribune Business revealed it appears to be the former Continental Foods, which was based off Joe Farrington Road in eastern New Providence.

The address and post code for Everything Fresh Bahamas, which is listed as 28 Marigold Farms Road, match those for Continental Foods as listed on the Department of Inland Revenue's (DIR) database of VAT taxpayer identification numbers (TINs).

When this newspaper rang the phone number for Everything Fresh Bahamas, attempting to contact Continental Foods' managing director, Patrick Treco, it was told he had gone out. Mr Treco, who also operated the well-known Blue Hill Meat Mart plus other food retail outlets, did not return the call seeking confirmation of the sale and whether he is now a minority partner with Everything Fresh.

However, Gregory Pullen, Everything Fresh Jamaica's chairman, indicated to the company's shareholders that The Bahamas expansion is the first step in replicating its business model throughout the Caribbean via an aggressive growth strategy financed by the proceeds of its recent initial public offering (IPO).

"Consistent with our vision when Everything Fresh Jamaica completed its IPO, the company has sought to replicate its operations and its success in other islands of the Caribbean region," Mr Pullen wrote.

"In early 2019, with the blessing of the Board, the company began exploring a transaction that would accomplish this critical diversification goal...... Everything Fresh Bahamas is focused on supplying food products to supermarkets and the retail trade in The Bahamas.

"It has realised remarkable growth from a standing start, propelled by a knowledgeable, vibrant and logistics savvy blend of Bahamian and Jamaican staff. Despite the challenges of the COVID-19 pandemic, however, we expect to see it continue to deliver value to the market and grow further in the near term."

Mr Pullen did not respond to Tribune Business messages and phone calls seeking comment before press time last night. However, his letter indicates that the deal involving Continental Foods had been in the works for more than a year and dates to pre-COVID, with "the transfer of a 60 percent stake of [in] Everything Fresh Bahamas" to the Jamaican parent now complete.

This suggests that Everything Fresh Jamaica first invested in Continental Foods via a loan or other alternative mechanism until it obtained all the necessary Bahamian government and Central Bank approvals to convert this to equity.

Its 2019 annual report shows $482,616 described as "other investments", with the accounts describing this as a "deposit on a business opportunity that will be realised in the near future". That is a likely reference to the Continental Foods deal.

By acquiring an existing Bahamian food wholesaler/distributor for a relatively modest six-figure sum, Everything Fresh has given itself an immediate platform from which to expand into this market, capitalising on the relationships and knowledge that Continental and Mr Treco have built-up over the years.

The deal, though, represents another waiver of The Bahamas' National Investment Policy which purportedly reserves the wholesale/distribution industry for Bahamian ownership only. However, the Christie administration set a precedent for this by approving Sysco's acquisition of Bahamas Food Services (BFS), and the COVID-devastated economy needs every cent of investment it can get.

Everything Fresh's arrival thus threatens to shake up a highly competitive Bahamian food distribution and import market, especially in the meats, dairy and seafood segments where it operates. Mr Pullen, in an interview with the Jamaica Gleaner, said the Continental Foods acquisition had received exchange control approval from the Central Bank of The Bahamas.

This implies it must have also obtained relevant National Economic Council (NEC) and Investments Boards approvals. "We had invested in an operation in Bahamas some time ago and it had been booked as an investment on the records," Mr Pullen said.

"Recently, we applied for and were granted approval from the Central Bank of Bahamas to purchase that operation, so we converted that part of the loan into equity and we now own 60 per cent of the operation."

Everything Fresh has only been in existence since 2008, with Mr Pullen suggesting it will also target opportunities to serve the Bahamian hotel industry once it re-opens with product imported via its Miami warehouse. Hotel sales account for 85 percent of its business in Jamaica.

"Similar to the operations in Jamaica, The Bahamas has a large tourism industry and we felt that tourism is underserved there, so we moved in to take advantage of that void which existed to improve top and bottom line earnings,” Mr Pullen said in his interview.

"The interesting thing about The Bahamas is that we don’t have the rigid controls that we have here. So in The Bahamas we import everything - from milk, eggs, chicken parts – there are no restrictions. From our warehouse in Miami, we can literally run shipments to The Bahamas in hours because it’s so close, so we can now import even perishables into The Bahamas."

Everything Fresh Bahamas was said to be operating with 12 employees, and using its parent for back office and support services.

Comments

jamaicaproud 3 weeks, 5 days ago

Bro. Good move? You gotta train someone and get out in 12 months.

0

JokeyJack 3 weeks, 5 days ago

They chose the right country to invade. Bahamians don't have enough intelligence and coordination to publicize which stores are ordering groceries from this warehouse and organize a boycott. Heck - just like it was not revealed who the actual company is - it may even be against the law to organize a boycott in the Bahamas. It is illegal to protest "without a permit". So the people have no democratic tools at their disposal to prevent this take-over.

They can only go in the store and buy what is on the shelves. No knowledge of where it comes from. Just spend ya money, pay ya VAT, ink ya fingah, and shut ya mout.

0

jamaicaproud 3 weeks, 3 days ago

What is the basis of your xenophobic rant? You need to stop your superiority complex. You are perhaps worried that someone is going to get a work permit or whatever. So what, it's Al business. Do you know how many thousands of Bahamians are in Jamaica studying? And we treat them with respect.

0

Dawes 3 weeks, 2 days ago

Unfortunately Jamaicaproud my country is full of people like this who don't bring any use to their country except blaming others for their problems

0

bcitizen 3 weeks, 4 days ago

"The interesting thing about The Bahamas is that we don’t have the rigid controls that we have here. So in The Bahamas we import everything - from milk, eggs, chicken parts – there are no restrictions. From our warehouse in Miami, we can literally run shipments to The Bahamas in hours because it’s so close, so we can now import even perishables into The Bahamas."

Great another company who is looking at becoming another food import driven business doing nothing to reduce our food import bill and helping to create some measure of food security for this country and reduce our foreign exchange demands just what we need right now. Might as well green light Walmart one time and get it all done.

0

Chucky 3 weeks, 4 days ago

We need this. The more competition in the food industry the better.

Tired of the same old rotten milk and mouldy bread from super value

0

realitycheck242 3 weeks, 4 days ago

This acquisition now puts you Jamaicans on the radar. Beware the established food wholesale/distribution industry owned by the established Oligarchy do NOT like competition. you may go the way of some of the others who have tried to enter this arena because of frustration. Remember a store called "Everything must go".or "Phils Foods services ltd"

0

jamaicaproud 3 weeks, 3 days ago

Man people are funny. You don't grow enough food to feed a small population but you want to boycott a startup from another country. The obsession with hating foreigners especially non Caucasian is just laughable. Why don't you open your own store? I wonder what your reaction will be when Jamaican banks come in to fill the slots left by Scotia.?

You are welcome to start Bahamian companies in Jamaica we are not that myopic and very open minded. And yes Jamaica does import food. But it's for people's tastes it's not a necessity. There is enough produced locally to meet our needs.

0

banker 3 weeks, 1 day ago

I am quite impressed with Jamaica lately. They have cleaned up a bit of Kingston. The airport lounges are true cultural icons. There is a lot more money around, and you can see it in the construction going on. They have a high tech center and Startup Jamaica has now a 6 year history for tech startups in conjunction with the Jamaica Development Bank, and they have successfully exported technology. In 2017, they exported $1.165 Billion US dollars in technology. They have 10 startups that are over $50 million in turnover. A Canadian company has been in St. Anne's for over 12 years, employing 97% Jamaicans. Here, our Grand Bahama Tech Hub is all talk and no action.

0

Sign in to comment