A feud brewing between the two alcohol producers in The Bahamas has caught the attention of a global watchdog. Brauwelt International, an organization specializing in the brewing and beverage sector, has chosen to focus on the increasingly tense relationship between Bahamian Brewery and Beverage Company in Grand Bahama and Commonwealth Brewery Limited (CBB) in Nassau in its November report. Referring to "a fierce turf war" to snap up market share, Brauwelt highlighted CBB's dividend policy whereby 100 percent of its net income is distributed as dividends to shareholders. "What are the implications of such a high pay-out? To all appearances, a fierce turf war as Commonwealth Brewery struggles to protect its market share from being eroded by a smaller competitor," the report stated.
The watchdog estimated Bahamian Brewery and Beverage Company's market share at 17 percent. Imports account for eight percent, while CBB enjoys approximately 75 percent. "Even in a stagnating beer market you would have thought that this sort of split would allow both brewers to live happily ever after," Brauwelt said. "Ah, but not so in The Bahamas." The report also makes reference to the "David-against-Goliath twist", in the sense that CBB is majority owned by global beer giant Heineken. Its Grand Bahama competitor, owned by Jimmy Sands, is trying to chip away at that market share through a marketing campaign focused on national pride.
He told Guardian Business yesterday that it's "very interesting" that an international body has stood up and took notice of the situation in The Bahamas. "They are internationally recognized. I thought it was very interesting that the rest of the world is noticing this, where an international company is using economic strength to squeeze me out," according to Sands. The CEO pointed to Eclipse Beer, sold only in Grand Bahama, which sells for just $18 for 24 bottles. He claims CBB sells this product at cost just to disrupt its sales on the island. He has also accused CBB of taking over sponsorship opportunities and demanding retailers and restaurants only sell Heineken products.
Nico Pinotsis, the CEO of CBB, said the brewery simply follows normal business practices. "Major events require money and ask people to sponsor them. When you sponsor events, you make agreement with respect to the money you put in and the expire at the event. And you have expectations of what organizers will give you in return," Pinotsis told Guardian Business. Brewery Wars aside, Sands said work on the company's "flagship" building in Nassau is nearing completion. The completion date, however, has been pushed back to January.
The building on Nassau Street, just off Bay Street West, will include administration offices, a distribution facility and a retail shop. Sands said 12 Bahamians will be employed there. "It's a big step up. It'll be the anchor for our company in the capital," he explained. Turning to possible global distribution, the CEO noted that he has signed a few contracts lately to enter the Florida market. The brewery plans to "ease its way in" and begin with relatively modest exports, which should begin sometime in mid 2013. "The demand is there for it. But I don't expect it to be large at this point. We don't have the capacity. It is also a healthy item to have as far as our country is concerned. We have very little exports here." The Bahamian Brewery and Beverage Company has received requests for distribution in Canada and the UK, but Sands is holding back for now to see how this first international venture goes. "I'm a firm believer in taking small steps. But certainly, tremendous opportunities exist," he said.
Click here to read more at The Nassau Guardian
