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THE HOYOS FILE: There’s a reason why boycotts are stupid

Pat Hoyos

THE HOYOS FILE: There’s a reason why boycotts are stupid

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The Barbados Manufacturers Association (BMA) knows how to dish it out, but it seems they can’t take it.
The BMA is famous for doggedly calling for protection of local manufacturers, in the form of those ridiculous surtaxes on a variety of products, even when the manufacturers don’t actually produce the items.
In the increasingly cosmopolitan retail environment in Barbados, where demand is growing for products not produced here, the BMA screams jobs, jobs, jobs, every time some other company – say a restaurant or garment retailer – wants to import items that fall into the broad categories protected by the surtax.
These can often add 184 per cent of the landed cost of the item, pricing it out of the market.
But this is alright with the BMA, which seems not to be too concerned about any other jobs, jobs, jobs in retail, food, hotels, or any other sector outside its own.
Its policy is to say, well, let us know what you need and we will see if we can’t substitute something else for it (who would know the difference?) or maybe we will see if one of our members might be able to get around one of these days to perhaps trying to produce the item you want.
Don’t believe me? Check with Subway. But when the shoe is on the other foot, and another marketplace decides to go all protectionist too, no matter whether it will hurt other sectors of their economy, or their tourist trade, the BMA bites its tongue as it seems to want to cry out “Ban their goods from coming in here too!”
The BMA didn’t go that far last week when the news emerged that St. Lucia was slapping a 70 per cent surcharge on beer and malt imported from some other CARICOM countries. Instead it suggested that Bajans should vote with their wallets.
St Lucia’s decision to stop routinely licensing imports from outside of the Lesser Developed Countries – or LDCs – within CARICOM, and to instead impose a blanket 70 per cent tariff is quite legal, but we all know what the law is.
Here’s the legal basis, as I understand it: Article 164 of the Revised Treaty of Chaguaramas, grants the right to Lesser Developed Countries or LDCs in CARICOM to impose a duty of up to 70 per cent for a brewed product coming into an LDC from an MDC, and up to 100 per cent for a brewed product coming from outside the region.
Although that provision has been in the treaty since 2006, it was only last week that St Lucia decided to enact it.
Up to then, the country relied on the old licensing regime, under which the importer/ distributor in the country would apply for a licence to import a certain numbers of cases of beer and malt, which on almost every occasion would be granted.
As we all know, the international brand Heineken Beer is brewed and bottled in St Lucia, along with Piton Beer, the local brew, and Banks Beer has always had only a niche in their home market. Two years ago Banks’ exports to St Lucia reached just over US$250 000, but fell back to about US$160 000 last year.
With a new marketing campaign centred around regional cricket, Banks saw its export sales in the OEC, including St Lucia, rising again, and it was hoping to reach about US$200 000 in sales there during the course of this year. Still very modest sales when compared to the approximately $5 million worth of Heineken that comes into this country every year.
But here’s the kicker: At roughly the same time last week that the BMA was pinching itself to try to stop demanding outright a boycott of St. Lucia-made beer, the CEO of the company most affected by the new tax, Banks Holdings Ltd., was telling this reporter that his company was not among those supporting any such boycott of beer or other products from St Lucia.
Managing director Richard Cozier said Heineken played an important role in the beer market here, which actually suited Banks’ marketing strategy.
Mr. Cozier was concerned that if other LDCs – mainly the countries of the OECS – decided to follow St. Lucia’s lead and implement Article 164, it could cause a considerable drop in trade between the MDCs and LDCs.
Worse, he noted, it could work against Barbados’ efforts to get new investment for export-oriented manufacturers as it would be better for them to set up in an LDC and export to an MDC without the extra tariff rather than the other way round with the extra 70 per cent duty imposed.
Now that makes much more sense to me than knee-jerk reactionary calls for boycotts and voting with your wallet.
If it is good for Barbados to have an international beer here from the consumer’s point of view, then surely it is good for us to have Burger King, Subway and other franchises, which give the products on offer to the consumer a much more international flavour (literally).
But the longer we keep trying to go the protectionist route the deeper we hurt our entire economy. Banks understands this, and despite the competition from Heineken and Piton, Carib and more recently Hairoun out of St Vincent, BHL came up with another local brew, Deputy, which has far exceeded all expectations.
When a tourist comes here they want to feel confident that the comfort foods, beverages and other consumer brands they know and love are all here to greet them. Once those are present, they start to try the local fare and sometimes end up liking it as much or better. You don’t build a tourist industry by excluding popular brands from the places your customers come from.
That’s the reason why boycotts are dumb. Barbados understands that.
Maybe St Lucia and the BMA will, one coming soon.
Pat Hoyos is a long-standing journalist and publisher of the?Broad Street Journal.