BE OUR GUEST: Outdated act hurting rum industry
The local rum industry has been receiving lots of publicity of late. Indeed, it seems as if every minister, the Governor of the Central Bank and the man in the street are offering kudos to an industry that continues to earn increased foreign exchange each year. But the praise is more lip service than anything else.
The industry continues to be regulated under an outdated 1905 Spirits Act, which mandates that customs officers be employed at their existing pay grades, be paid “morning allowance”, “lunch allowance”, “travelling allowance”, be accommodated in an air-conditioned office and that all bottling operations cease the first working day of every month in order that a physical stock be taken by customs – which by the way is taken daily.
Moreover, supervision is only applied during normal working hours, five days a week while modern distilling operations are 24/7. Mercifully, Customs allows distilling to continue outside these hours, but no routine operations, such as barrelling, tank transfers or bottling, can be conducted. Thus plants are open and staffed but handicapped as to what functions may be conducted. No other manufacturing operation in Barbados, whether subject to excise and/or VAT, is subject to such restrictions.
The requirements of the act, whether it be the elaborate paperwork and permissions required to carry out routine operations or the forced expense of insuring against losses that cannot be realised, can only be described today as breathtaking inanity.
No government that is serious about the existing and potential importance of this industry can allow this regime to continue.
But that is not all. The industry is denied the use of natural gas to operate electrical generators, which are necessary to “beat” the increasing cost of electrical power, charged outrageous rates for water supply and made to pay a fixed monthly charge of $9 000 per month for the privilege of turning on power and before a single kwh is consumed.
The industry is not asking for handouts or unsustainable subsidies. It is just asking Government:
1. To understand its importance and potential and redirect its policy accordingly.
2. To create an operating framework that will allow the industry to flourish.
The industry is holding its breath. Does it die or does it survive and prosper? The ball is in the Government’s court.
Sir David Seale is chairman of R. L Seale & Company Limited.