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Bahamas: A major alcohol importer says, "Raising taxes on alcohol, especially wine, would have a strong negative impact on the hotel sector, it would increase already high prices on the wine list..."
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Bristol says spiking alcohol tax would hurt hotels:
By VERNON CLEMENT JONES, Senior Business Reporter -
Nassau, Bahamas:



A major alcohol importer is cautioning the government against adopting recommendations to raise taxes on that product, arguing the move would devastate a hotel industry already awash in complaints over high bar tabs.

"It certainly would not be a good thing," said Eddie Gardner, VP of sales and marketing for Bristol Wines and Spirits. "Raising taxes on alcohol, especially wine, would have a strong negative impact on the hotel sector, it would increase already high prices on the wine list.

"Tourists already complain that the prices are too high because they're paying $19 for wine that would cost them $9 in the States."

Gardner is focused on possible fallout from any move to increase the government's revenue stream courtesy of alcohol taxes.

Last week, a special committee of public servants proffered the idea, suggesting an increase in duties and stamp tax on liquor imports could help fund those infrastructure projects on the government's blotter.

Customs already collects its share of the nearly $100 million in booze shipped into The Bahamas each year, with an additional 50-percent being tabbed onto the price of a bottle of wine.

That's substantially more than the $10 or $11 dollars the government claims on every imperial gallon of gin, rum or liqueur cleared by Customs.

On the whole, the Bahamian rates are relatively high compared to others across the region. Any upward movement, even to raise the seven-percent stamp tax on wine and ale, would likely heighten visitor concerns about the high-end nature of the destination, said Gardner.

It's a lesson that other Caribbean nations may have learned firsthand, moving in recent years to lower their tariffs on alcohol imports, not increase them.

Moving in that direction may have led to a growth in revenue, said Tom Tyler, chairman of Caribbean Producers Jamaica Ltd.

"Duties on alcohol importation were very high here for years," he told Guardian Business Tuesday. "Then the government moved to cut them, which has not only curtailed the illegal import of wine and spirits, but made the product more affordable to Jamaicans.

" People are buying better wine now."

By "better wine" Tyler means more expensive.

That higher price tag translates into more money for the Jamaican treasury given that its 33-percent cut on a $100 bottle of Merlot is considerably more than on a $10 bottle of Muscatel.

"The current Bahamian duties on wine seem just about right, if a little on the high side," said Tyler. His firm is in fact the largest importer of wine in Jamaica.

But even Gardner is hesitant to suggest that a rise in tariffs would immediately translate into weak sales for hotel bars and restaurants in The Bahamas. It might, however, work to drive both future resort developers and tourists, alike, into the arms of competitors like Jamaica and the Dominican republic.

Still, it remains unclear if the government will take the panel's recommendations seriously or look elsewhere to grow its income.

January 23, 2008 | 9:01 PM Comments  0 comments

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