Christmas jeers: Booze costs rising

Alcohol wholesalers and retailers on Grand Cayman are bracing for a substantial increase in duty charged for the importation of beer, wine and spirits.

christmas jeers

Mario Mainville stocks up on liquor and wine for the holidays at the Jacques Scott retail store on the corner of North Sound and Shedden Roads. Photo: Jewel Levy

They aren’t certain when the new charges will take effect, but the initially proposed January date was moved up during last week’s Legislative Assembly proceedings. The duty hike is now expected to occur sometime before the Christmas holiday.

‘We’ve been told that it’s going to be imminent, within the next 10 days,’ Blackbeard’s Liquor Ltd. Finance Director Ben Cullen said Wednesday.

When the new Customs Tariff Amendment Bill is signed by the governor, customs officers will move to perform inspections at bonded warehouses where alcohol products are kept.

During those inspections, stock is taken of all beer, wine and liquor supplies on hand and any products removed from the warehouse following the customs inspection will be subject to the new duty rates. Typically, customs tariffs are not charged until the alcoholic items are removed from the warehouse.

Alcohol supply warehouses are locked down during the customs inspections, which means nothing can be removed until officers finish their work. The inspections usually take a day or two to complete.

Those new rates are as follows:

*For all ales, beers, malt liquors, ciders, meads and wine coolers duty will go from $1.50 to $1.65 per litre.

*For white, red or rose table wines duty will increase from $3.00 to $3.30 per litre.

*Desert wines like port, sherry, vermouth and others that have lower than 30 per cent alcohol will see duty go from $4.50 to $4.95 per litre.

*Champagne duty will go from a percentage of value to a flat rate of $10.50 per litre.

*Duty on other sparkling wines will rise from $3.75 to $7.50 per litre.

*Unsweetened spirits of less than 50 per cent alcohol will have duty go from $10.50 to $11.55 per litre.

*Sweetened spirits with greater than 50 per cent volume of alcohol will go from $14.25 to $15.68 per litre. Sweetened and flavoured spirits, including liqueurs will increase from $12.00 to $13.20 per litre.

The duty increases will mean prices to the consumer will go up since the alcohol distributors, liquor stores, bars and restaurants will have to pay more to acquire them.

According to liquor store managers and owners, one tariff increase that stands out is the 100 per cent hike on duty for sparkling white wine. The remainder of the increases work out to about a 10 per cent increase on average.

News of the pending duty hikes has since spread around the Islands, and Tortuga Rum Co. President Robert Hamaty said it’s actually having a positive effect on sales.

‘I know that people hearing that duty is going up would rush to the liquor store,’ Mr. Hamaty said. ‘But it’s only good for a short while.’

‘There has been a run on sales,’ Mr. Cullen said. ‘People…are ordering two weeks of stock when they would normally order just one. It makes good sense.’

Some liquor stores have noticeably increased stock at their own retail outlets, but whether that is due to the duty increases or simply because of the busy holiday season isn’t clear.

Paul McLaughlin of Jacques Scott liquors said increased supplies were just normal Christmastime stocking up at his stores.

Mr. Hamaty said most retail outlets are much smaller than the vast spaces available in the bonded warehouses, so its unlikely most retailers can remove a huge amount of stock.

‘If the store is full, it’s full,’ he said.

Mr. Cullen said Blackbeard’s was considering holding its prices down through Christmas despite the duty increases.