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Gas companies protest cheaper butane sold by BNE

Will there be a shutdown of butane gas outlets this Wednesday? That's what is being threatened by Belize Gas Company Limited, Western Gas Company Limited, Zeta Gas Limited and Gas Tomza Limited. It all has to do with the production of butane by Belize Natural Energy, at prices that the importers say cannot be undersold. On January sixth, 2011, the importers wrote to the Minister of Trade, Erwin Contreras, stating that since they have been unsuccessful in meeting with government, they have decided on the one day shutdown. According to the importers, they are disadvantaged because BNE produces locally while they have to pay import duties. Earlier this month, BNE provided butane free of cost to residents of Georgeville but the company is unable to provide the demand of the entire country. BNE's Public Relations Manager, Daniel Gutierrez says that their sale of butane at cheaper rates cannot put the importers in jeopardy, since the company can only supply thirty percent of the country. According to another butane distributor, who buys from the importers to retail, BNE's butane has contaminants, an allegation that Gutierrez vehemently denies. On the contrary, Gutierrez said that BNE's product is of better quality than the imported product. News Five spoke this evening via phone with Jose Trejo, the Director of the Belize Bureau of Standards, which is the regulatory body for butane quality and prices. He says that the Ministry of Trade will meet with the importers and BNE representatives on Wednesday.

Voice of: Jose Trejo, Director, Belize Bureau of Standards

"Cabinet will discuss recommendation and proposals which will be submitted tomorrow to try and come to a position with respect to the supply and distribution of LPG so we intent to meet with the importers on Wednesday at ten o'clock. So that is where we stand in terms of trying to move swiftly and try to avoid any disruption in the supply of this basic commodity. We want all parties to be able to agree to the proposals that will come out. Obviously each party will have to ensure that we meet at the middle ground on what decision we take. Certainly the issue is absorbing the price of the locally produced LPG into the current market system so that is one of the things that we will hope to iron out on Wednesday. We have been working with them in terms of trying to move towards implementing standards for the industry. And we are right now working along with the CARICOM regional organization for standards and quality to get an expert to come into the country by end of this month, latest mid February to come and assess the LPG market in terms of charting our a road map as to where we start with quality and what investment the bureau of standards will need to make in terms of insuring that we monitor the market as it relates to the quality issue and more importantly, the safety issue."

This afternoon, one of the largest importers, Belize Western Energy Limited broke ranks stating that it is not taking part in the shutdown. When News Five contacted BWEL, its Manager Lionel Reyes said that he was not in a position to speak with us. A hundred pound cylinder of butane ranges from hundred and twenty six to one hundred and thirty-one dollars.

Channel 7


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Gas companies protest cheaper butane sold by BNE

Will there be a shutdown of butane gas outlets this Wednesday? That's what is being threatened by Belize Gas Company Limited, Western Gas Company Limited, Zeta Gas Limited and Gas Tomza Limited. It all has to do with the production of butane by Belize Natural Energy, at prices that the importers say cannot be undersold. On January sixth, 2011, the importers wrote to the Minister of Trade, Erwin Contreras, stating that since they have been unsuccessful in meeting with government, they have decided on the one day shutdown. According to the importers, they are disadvantaged because BNE produces locally while they have to pay import duties. Earlier this month, BNE provided butane free of cost to residents of Georgeville but the company is unable to provide the demand of the entire country. BNE's Public Relations Manager, Daniel Gutierrez says that their sale of butane at cheaper rates cannot put the importers in jeopardy, since the company can only supply thirty percent of the country. According to another butane distributor, who buys from the importers to retail, BNE's butane has contaminants, an allegation that Gutierrez vehemently denies. On the contrary, Gutierrez said that BNE's product is of better quality than the imported product. News Five spoke this evening via phone with Jose Trejo, the Director of the Belize Bureau of Standards, which is the regulatory body for butane quality and prices. He says that the Ministry of Trade will meet with the importers and BNE representatives on Wednesday.

Voice of: Jose Trejo, Director, Belize Bureau of Standards

"Cabinet will discuss recommendation and proposals which will be submitted tomorrow to try and come to a position with respect to the supply and distribution of LPG so we intent to meet with the importers on Wednesday at ten o'clock. So that is where we stand in terms of trying to move swiftly and try to avoid any disruption in the supply of this basic commodity. We want all parties to be able to agree to the proposals that will come out. Obviously each party will have to ensure that we meet at the middle ground on what decision we take. Certainly the issue is absorbing the price of the locally produced LPG into the current market system so that is one of the things that we will hope to iron out on Wednesday. We have been working with them in terms of trying to move towards implementing standards for the industry. And we are right now working along with the CARICOM regional organization for standards and quality to get an expert to come into the country by end of this month, latest mid February to come and assess the LPG market in terms of charting our a road map as to where we start with quality and what investment the bureau of standards will need to make in terms of insuring that we monitor the market as it relates to the quality issue and more importantly, the safety issue."

This afternoon, one of the largest importers, Belize Western Energy Limited broke ranks stating that it is not taking part in the shutdown. When News Five contacted BWEL, its Manager Lionel Reyes said that he was not in a position to speak with us. A hundred pound cylinder of butane ranges from hundred and twenty six to one hundred and thirty-one dollars.

Channel 5


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BUTANE GAS COMPANIES THREATEN TO STRIKE ON WEDNESDAY

In December of last year, the government of Belize in conjunction with Belize Natural Energy distributed thousands of gallons of free butane gas to residents of the Cayo district.  At that time it was a welcome relief for those on the receiving end and an impressive publicity campaign for a commodity being produced locally that, albeit on a small scale.  With the promise that it could bring down the price to consumers, BNE is upbeat that it can supply roughly thirty percent of the demand for butane on the local market and has been lobbying government for a license to sell directly to consumers.  But not everyone is happy with such a prospect. Today, the importers of butane gas fired off an angry press release saying they are frustrated that since June of last year they have been asking for a standard and regulation of Liquid Petroleum in Belize, specifically as it relates to Belize Natural Energy Limited and that government has, quote: "not been taking our concerns seriously." End of quote. The butane importers and traders, namely Belize Western Energy Limited, Belize Gas Company Limited, Western Gas Company Limited, Z-Gas and Grupo Tomza say that they are concerned about the recent disruption that the market is currently facing and that they are evaluating the feasibility of continuing operations, despite millions of dollars in investments. In a letter, dated June sixth, a copy of which was sent to the media today, the importers wrote to the Minister of Economic Development and Trade Erwin Contreras about the issue of Belize Natural Energy competing with imports as it relates to the sale of butane gas on the local market. The letter says, and we quote:  "it has been pointed out a number of times that is an unethical business practice for BNE to be selling to the market at large as they have an advantage over us the importers as they are the producers and their costs vary significantly from ours," end of quote. In the letter, the importers note that last November they propped to buy butane from BNE on conditions that BNE sells only to importers and that the product is clearly labeled so that customers have the option to buy the product they prefer. The importers letter to the Minister noted that the current situation they are facing is critical to their operations and is affecting business significantly. The importers say they want immediate action by government to address their concerns. And to ensure that Belmopan gets the message, they have called a nationwide shutdown of business operations for Wednesday if their concerns are not addressed.  But no sooner than the press release announcing the strike went out than dissention appeared.  Belize Western Energy Limited this morning told Love News that they are not in agreement with the complete countrywide shutdown and that they will continue with normal operations on Wednesday.

LOVEFM


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Dealers fight BNE move into butane!

Four of the five major liquid petroleum gas (LPG, known as butane) importers in the country have planned a demonstration/strike for this Wednesday, January 26, to protest the direct sale of butane by Belize Natural Energy (BNE) to the public.
  
LPG importers say that the strike is necessary to force the government to the negotiation table to prevent BNE from selling its gas directly to consumers.
 
On January 6, 2011, BNE had donated 3,500 gallons of its butane to the people of Georgeville, Cayo, calling it free assistance for Hurricane Richard’s victims.
   
BNE authorities had indicated to Amandala at the time that they were in the process of getting government approval for the direct sale of the butane to Belizean consumers.
  
Today, the local LPG importers sent out an unsigned press release with all five of their company logos. They are Belize Gas Company Ltd., Western Gas Company Ltd., Zeta Gas Ltd., Gas Tomza Ltd. and Belize Western Energy Ltd. (BWEL).
  
BWEL is the major importer, but today, the company sent out its own signed press release, in which it informed that while they hoped that a solution to the problem could be reached, they had not authorized the use of their logo on the companies’ release, nor had they been consulted about the matter before the release was sent out.
  
BWEL also said that they would not be participating in the proposed demonstration/strike for Wednesday.
  
The other importers’ release said in part: “Since June 2010 the importers have been demanding from government a standard and regulation of LPG in Belize specifically as it relates to BNE in the market as a producer not a retailer and despite all letters and meetings the Government of Belize has not been taking our concerns seriously. We realize that such a practice is unethical in any business setting. With all being said, we guarantee the constant permanent supply to 100% of the population in all corners of the country.
  
“The LPG importers remain in solidarity of the issues presented to government and have decided to go on a complete countrywide shutdown of its operations on Wednesday, January 26, 2011 pending the implementation of a fair regulation that will ensure our continuity in the market.”
  
While BWEL has distanced itself from the other importers’ press release and announced strike, the company, along with the other four importers, signed a letter, dated January 6, 2011, addressed to Hon. Erwin Contreras, Minister of Economic Development and Trade, telling him that “It has been pointed out on a number of times that it is an unethical business practice for BNE to be selling to the market at large, as they have an advantage over us, the importers, as they are the producers and their costs vary significantly from ours.
  
“Similarly, in the month of November, 2010, we met with government, and other stakeholders and the LPG association proposed that they are willing to purchase from BNE provided that BNE solely supplies importers, and given that the product is labeled BNE so customers have the option to buy the product they prefer.
  
“We are again bringing this to the government’s attention as the current situation we’re facing as a result of this is critical to our operations and is affecting our business significantly.”
  
While BWEL, in its release today, categorically stated that it “will not be participating in a country-wide strike with the rest of the LPG (butane) companies this Wednesday, January 26, 2011,” the company signed its name to the January 6, 2011 letter to Minister Contreras, which included the statement that “we would like government’s immediate input into this very important matter as we have all decided to shut down business operations on January 26, 2011 if our concerns are not addressed.”
  
Director for the Belize Bureau of Standards, Jose Trejo, during a phone interview with us today, told us that the Government of Belize has in fact been dialoguing with the LPG importers and further explained that the issue is receiving due attention.
  
Trejo told us, “This is an ongoing dialogue we’ve had with importers; this is not something that is just popping up on us; Government certainly has been dialoguing with them; we have been having meetings internally with Government itself and the importers; different solutions and a way forward have been discussed.
  
“The supply of LPG from the local producer, which is BNE, we have been trying to iron out so that it can easily be absorbed into the market, and so that it doesn’t create any unfair advantages to disrupt the supply.”
  
Trejo then told us that the issue will be addressed in Cabinet tomorrow, Tuesday, and that by Wednesday, January 26, the government should have answers for the LPG importers.

Amandala


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Butane suppliers get ready for 1 day countrywide protest

Butane importers are planning to close businesses this Wednesday to protest competition coming from Belize National Energy. BNE says it can retail butane for prices much cheaper, about thirty-five percent less per hundred pound cylinder, than the importers, but it can only supply for now, thirty percent of the country's demand. The Liquid Petroleum Gas importers: Western Gas Company, Belize Gas company, Grupo Tomza and Z- Gas want government to step in to keep them in business. They are currently selling butane between one hundred and twenty-six dollars to one hundred and thirty-one dollars per hundred pound cylinder. When we got the perspective from consumers today, it all boiled down to economics. News Five's Marion Ali reports.

Marion Ali, Reporting

There was no restaurant in the City which we visited that supported the notion that the Belize Natural Energy Limited should be prohibited from selling butane gas directly to the public at cheaper rates than the importers. We spoke to cooks and chefs ranging from upper scale to everyday restaurants and all of them said they support the idea of cheaper butane prices.

Voice of: Restaurant Cook

"If we could get it cheaper dah Belize I mean come on. Things hard already dah Belize, soh if the people dehn could get dehn gas cheaper well that dah di way we have to goh. Ah mean we noh want box out nobody because everybody have to live, but that dah the way the world work."

chef dwayne

Chef Dwayne, Mada Fish Restaurant

"We restaurant people when we set our menu from the first we know we already include the gas in our prices. So if they raise this prices, we can't go to fi we patrons and fi we customers and say, 'hey we have to charge unu wah two dollars more or one dalla more. If dah that, I thinkw e betta go back pan fiyah haat."

Marion Ali

"If the prices go down does that mean it will reflect in your prices?"

Chef Dwayne

"Actually, we di try work round they people yah. We noh know what he outcome will be, but I just hope the Prime Minister really look pan everybody else, yoh understand?"

Voice of: Cook

"If you want the expensive, the imported one, you buy that. Soh ih goh to weh you want buy, weh you could afford fi buy. So I think dehn should lef dehn fi mek we choose weh we could afford."

One of the restaurant cooks we spoke with said that she has tried butane from BNE and that its quality is good.

Voice of: Restaurant Cook

"I support BNE because that cheaper and ih better and we poor soh we need that."

Marion Ali

"You buy from BNE?"

Voice of: Restaurant Cook

"Yeah, we buy from BNE."

Marion Ali

"How does the gas burn?"

Voice of: Restaurant Cook

"Ih burn almost the same. So, Ih burn good."

Voice of: Cook

"If you can't afford fi buy wah cylinder weh wah cost yoh wah hundred and odd dollars and you could pay wah cylinder weh wah cheaper price, I woulda goh for it too."

Voice of: Restaurant Cook

"Just mek the government try work out something and come to one agreement with the two companies soh people could choose."

Voice of: Restaurant Cook

"I'd rather go pan the cheaper side. Just want a cheaper price to help my situation out."

douglas young

Douglas Young, Proprietor, Deep Sea Marlin's Restaurant

"You'd a want the cheaper price, but weh di use ah buy it cheap today and tomorrow dehn raise double pan yoh?"

Even Lee Mark Chang from Chon Saan Palace Restaurant says cheaper is better.

Lee Mark Chang, Proprietor, Chon Saan Palace

lee mark chang

"We use roughly about eight hundred maybe sometimes a thousand gallons per month and gas is going roughly around four, four-fifty a gallon. So you can know the price of gas. Where it as was before, I think about fifteen years ago I think it was about two dollars, two-twenty-five a gallon. So it definitely makes a huge difference."

Marion Ali

"But we noh hear Chon Saan chicken gwen up everyday or ever month, the way gas prices go up?"

Lee Mark Chang

"No, we try to keep the consistency in terms of the price leveling and sometimes as a businessman, we have to absorb certain losses. Take for example if the price of butane does go up, usually we absorb it and we try to save it in other areas that we can. But as a businessman we have to be flexible and if the price of gas or butane goes up, we have other departments and areas that we try to conserve on."

Marion Ali

"But cheaper is always better?"

Lee Mark Chang

"Cheaper is always better for everybody."

The importers and representatives of Belize Natural Energy will meet on Wednesday morning with personnel from the Ministry of Trade and the Belize Business Bureau to chart a way forward. Marion Ali for News Five.

One gas company is breaking ranks. Belize Western Energy Limited, the largest importer of butane, says it will not join in the one day protest and that it has the capacity to supply the entire country during the shutdown.

News 5


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Belize Baker's Association supports the production of cheaper/supply of butane gas

San Pedro Town, Belize January 25th, 2011
The Belize Bakers' Association is observing and expressing much concern over the looming idea of a possible interruption in the supply of butane gas on Wednesday, a decision taken by the Liquid Petroleum Gas Importers of Belize.

2010 was a struggling year for the association due to the increase in prices of key ingredients in the making of baked products, butane gas being one. Already, the association is bracing for a possible increase in the production cost of baked products in 2011 due to an increase in wheat prices on the world market. Hence, the possibility of cheaper butane gas is wonderful news for the association.

The association would like to express that it welcomes any decision or venture by any local fuel producers or importers that would see a cut in fuel prices, which could have a direct price effect on the production cost of baked products in Belize.

The Belize Baker's Association therefore supports Belize Natural Energy's (BNE) decision to seek government's permission to supply butane gas at a cheaper price. The members of the Belize Baker's Association is involved in the production of a product with a controlled price, hence we are asking the government that we be allowed to benefit from lower butane prices, something that BNE says they can offer to the Belizeans. With lower butane gas prices, our consumers will be able to benefit directly.

The production of butane at a cheaper rate to the Belizeans is a direct result of the positive impact the oil industry in Belize can have on the population and should be allowed. But we are also of the idea that those that need it most, such as hospitals and other similar institutions, should also be given the first preference of obtaining such an essential material at a lower cost.


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Gas strike was only hot air; butane producers reach an agreement

Cooler heads prevailed today and a scheduled shutdown of butane depots did not take place after all. Instead four major importers, Grupo Tomza, Z Gas, Western Gas Company and Belize Gas Company met with the Belize Natural Energy and government representatives. This follows a meeting in Cabinet on Tuesday where it was agreed that the way forward was to allow butane to be sold at different prices for different grades. News Five's Marion Ali found out that the new measure will come into effect shortly.

Marion Ali, Reporting

There was a breakthrough today among butane importers, the local producer, Belize Natural Energy, and government representatives. And if you were wondering just how this will affect you, well butane will soon be available for sale at different prices per cylinder, depending on the quality you choose to buy.

Jose Trejo

Jose Trejo, Dir., Bureau of Standards

"You'll have a B.N.E. price, wherever it is sold, would be reflected throughout all the municipalities. We also will have a mixture, a blended price whereby any company who purchases from B.N.E. and imports, they will have to reflect in their price the amount that they are purchasing from B.N.E. That in itself will help to lower the prices as we speak. There is also going to be a price specifically for those companies importing from Pemex. As well as we have companies that are also importing from Central America, they will have a specific price as well. So you'll have the B.N.E. price, the blended price, the Mexican or imported price and you'll have the Central American price."

The main importer, Belize Western Energy Limited, was not present at a joint press conference called by the importers of butane. But BWEL issued its own release on Tuesday to say that it would not take part in a planned shut-down today. That company came under heavy criticism by its fellow importers.

Israel Manzanilla

Israel Manzanilla, Mgr., Western Gas

"We are all aware that one importer has been buying cheap gas at a very low acquisition cost here in Belize and they have been selling it at the regulated price which in they have been making some very good profit margin off the back of the consumers. We can give you our full assurance that, the four major importers present today, we have been importing gas and we have not been mixing our product. We have been selling the imported gas only."

Mike Reyes, Owner, Western Gas

Mike Reyes

"Our main concern is safety first. I mean you've heard a lot of horror stories. That's why we came to the government and we presented to them and said we won't continue doing business if this is the way it's going to be."

The importers also say that the butane produced by Belize natural Energy has contaminants that can also pose danger. But B.N.E.'s Marketing Manager, Daniel Gutierrez, who attended the meeting, flatly denied that allegation.

Daniel Gutierrez, Marketing Mgr., B.N.E.

Daniel Gutierrez

"What we want to do is be able to take LPG butane down to the Belizean public at a more affordable rate and whatever structure the government puts in place, we have always said we are willing to work with G.O.B. so that it is a smooth transition into that, but essential what we want to do is make the Belizean people have access to a lower product. We cannot guarantee the whole market, we only have thirty percent. B.N.E. will still be able to sell to the Belizean people a product that is high quality product at a more affordable price."

That more affordable B.N.E. price is around eighty-three dollars for a hundred pound cylinder, compared to the importers' controlled price, which ranges from one hundred and twenty-six to one hundred thirty-one dollars. While some of the importers were critical of the competition, there is nothing in place to hold any of them to a set standard. But that is about to change.

Jose Trejo

"We plan to get an expert here by mid-February, end of February to come and assess the LPG market looking at the entire supply and distribution chain-the equipment that they use, the mini-depots, the mini-plants, the cylinders and more importantly the mixtures cause that again is the most important thing. We want to ensure that we move towards quality. Hopefully when we get there we'll be able to replace the price mechanism that we have agreed to right now with one specifically based on quality. If you claim that your product is better than the B.N.E. product, then let market forces prevail. You can promote and market as much as you can and prove to the Belizean public that what you have is good and if what B.N.E. produces is not good, that is up to the consumer at the end of the day."

Marion Ali for News Five.

Gutierrez told us that if B.N.E. discovers and produces more petroleum, it will be able to provide more than the thirty percent it currently can supply. We'll have a reaction on the allegations against BWEL in Thursday's newscast.


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Butane: Can you Afford High Grade?

There was no butane strike today and there won't be one in the foreseeable future. That's because the Liquid Petroleum Gas importers had a productive meeting with government today where a regime for managing the industry was agreed upon.

The proposal was outlined by the importers at a press conference this afternoon in Belize City. Basically, the agreement is that BNE will be allowed to sell inexpensive, locally produced butane on the open market - but its butane - and everyone else's will be rated in different grades. The higher the grade, the higher the cost and the consumer can choose which he or she prefers.

Here's the outline of the proposal and why the Importers are pleased.

Israel Manzanilla, Western Gas
"We are looking for something like what we currently have in Belize with the fuel where we have premium, regular and super so this has been the proposal from government and the importers are very pleased with this information. Given this the decision to shut down has been called off."

Mike Reyes, Belize Gas Company
"We are saying they are bringing experts that are going to be reviewing the different types of gas and then they are going to be rating them and they are going to be rating them like: regular, super whatever and then as you bring it and you rate it they are going to also be given a price so if you bring Mexican gas compared to the Venezuelan, they will say ok you bought it at $2.00, we have a control price, you can only sell it at $3.00 or $2.50 so then the consumer will say Ok i want to buy that gas for $2.50 knowing that it is an inferior product or I want to buy this one for $4.50 knowing that it's a better product. Now it's our responsibility to tell the consumer 'ok, these are the differences with that product, this one will affect A,B,C and D. You might think it's cheaper but this I think you should look for, you want to buy one that will last you longer and this is what it will do. You look at the benefits and you choose.' So that's where the government pretty much stood and we say well we think that is fair enough because what we need is that the general public is aware of what they are buying."

Roque Reyes, Western Gas
"This way the consumer can get a just gas for their money. in other words they have a choice of 4 things. I get gas from Mexico for 28 years I've been getting the consistent mixture."

Mike Reyes, Belize Gas Company
"We are happy that the government is trying to find a solution. They say ok, 'If you guys choose to import this quality, we will rate it at this quality, you let the people know this is it.' They are proposing to buy an equipment where they will be testing these products, where they will say, 'You say you are bringing 70/30 and they test it and if it's not that, they will shut them down. So they are looking at all these things that they are proposing. Yes get stringent; we want the best for our people."

Notably BWEL - the country's single largest importer and supplier was not there. They have reportedly used BNE butane in the past and mixed it with imported product.

The butane sold in Belize - with the exception of BNE's local mix - is imported from Mexico and Central America. But for these importers -some of whom are subsidiaries of regional LPG companies - that BNE butane is an unacceptable product because they say it is not fully refined, and BNE getting into the market is also unacceptable.

Rogue Reyes, Belize Gas Company
"What is happening is that people don't know when they buy this product and their tank lasts less and their stoves begin to rot a lot faster, the regulator get mess up...I mean it's unacceptable gas, actually what we are saying that we are not against BNE, we are saying that we have certification from our suppliers where we can come and say look this is the product we are getting, this is the proof. If something happens, we are responsible for that. When I try to buy from BNE the first time, the first thing I ask, can I see your certification? what kind of gas are you selling me? i could see none, so I refuse to buy the product and when we see a producing company coming up in the market thinking they are this giant because they produce. To begin with I ask them how could a producer enter a market against importers who have been here for 20 years, invested multimillion of dollars, hiring over 600-700 people and nobody is saying anything, plus the product we know is not a product that should be out on the market."

We note that their view differs sharply from BNE's pitch man Daniel Guttierez who has been on the news saying that the BNE butane is a, quote, "far better product" and that is it has a quote, "higher butane content than the products out there�and it burns hotter, (lasts) longer, and it is safer to store and handle."

Presently, a 100 pound cylinder of BNE butane retails for 44 dollars less than a cylinder of imported butane.

Channel 7



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