Cayman Distributors has submitted a planning application to allow the Dart-owned company to use a section of its George Town warehouse as a distillery.
If approved, the change of use application would allow a small area of the Eastern Avenue building to be used for the distillation of spirits from raw ingredients.
The application has caused those already in the distilling industry to speak out because they believe the application, if approved, would put them at a disadvantage in the market.
Cayman Distributors Group managing director Mat Bishop said the domestic production of a small percentage of its product line would enable the company to better manage costs associated with the importation of alcohol.
“We have seen other liquor companies making similar decisions to distill or brew on-island and then package and distribute their products to the domestic market,” Mr. Bishop said. “We believe there are considerable cost advantages to on-island production. In the absence of any excise tax on local production, it makes sense for us to investigate this option. We have been blending and bottling our own house brands for many years, and this proposal is an opportunity for us to streamline some of the costs associated with doing so.” The public has until May 28 to offer support or submit objections to the proposal at the Central Planning Authority.
Currently, the Cayman Spirits Company is the island’s only distillery. It produces Governor’s Reserve Rum, Seven Fathoms Rum and, recently, Gun Bay Vodka,
Co-owner Nelson Dilbert said the company opposes the plans for another distillery and said the government, related businesses and the public should also be concerned.
“This market environment is compounded by the fact that Dart and its related entities would now control the entire vertical market for alcohol, now owning the country’s largest importer, the country’s largest distributor, a significant share of the island’s retail stores and on-premises, and soon a hotel,” Mr. Dilbert said.
“They currently own and operate BlackBeard’s, Big Daddy’s, West Indies Wine Company, Rum Stop and Liquor Outlet and also distribute Bacardi, Budweiser, Miller, Absolut and many more. To add a distillery would be to effectively allow Dart to operate inside their own independent economy,” he added.
Mr. Dilbert said the issue would affect the country as a whole. “Having built a small but successful business as young entrepreneurs over the last several years, we feel that this type of market control is generally dissuasive to future entrepreneurship and innovation,” he said.
Cayman Islands Brewery spokesman Matthew Leslie said the brewery had been made aware of the planning submission to install a distillery.
“We feel that the current distillery which is owned and operated by a hard-working team of young Caymanians is adequate for the supply and demand currently on island and for years to come,” Mr. Leslie said.
He added, “It would be very unfortunate to see this entrepreneurial team be forced out of business with the opening of a larger competitor that has control on distribution, liquor stores, bars and restaurants and soon to be hotels within its group.”
Mr. Bishop said Cayman Distributors has blended and bottled its own house branded spirits products for years and, if approved, the proposal would allow the alcohol to be produced on island instead of importing it in bulk. “CDG operates in a small but very competitive market where most players have some element of vertical integration built into their respective business models,” Mr. Bishop said.
“Our success is founded upon the need to satisfy consumer demand, and it would therefore be counter-productive for us to stop working with other local companies who produce or distribute brands that our customers want.”