Belize no longer manufactures cigarettes……yet it struggles in manufacturing tomato ketchup, BBQ sauces, pizza sauces, spaghetti sauces, Catsup Salsa Dulce and other tomato based sauces.

There are two avenues of cigarette importation into Belize: [1] Caribbean Tobacco Company (CTC), a subsidiary of the Roe Group that imports their own brands of cigarettes INDEPENDENCE, COLONIAL, MILPORT, etc….which is now manufactured in Trinidad & Tobago. It also imports Benson & Hedges, the largest foreign cigarette brand, from T&T. Together, CTC controls 99% of the domestic market for cigarettes [2] several companies in the Corozal Free Zone import many brands of cigarettes duty-free from India, China, etc. and some “escape” into Belize, while others are shipped in containers to Mexico and Guatemala.

When cigarettes were being manufactured in Belize…..the Government of Belize justified protecting the industry with very high customs tariff rates of 100%….in addition to Revenue Replacement Duty, General Sales Tax and Environmental Tax… that the imported brands were more than two times the price of the local brands. Of course, the local brands controlled 90% of the domestic market for cigarettes, as a result of this policy.

Verena Foods, a Belize-based manufacturer of food products, started manufacturing tomato-based sauces in 2002, and has since garnered 5% marketshare in Belize….without any customs tariff protection, as afforded the cigarette manufacturers.

The leading brands of imported tomato-based sauces in Belize are: [1] Grace kennedy 40% [2] DelMonte 18% [3] Criolla Salsa Dulce 18% [4] Hunts 7% [5] Regia 7% [6] Heinz, Kraft, La Costena, others 10%. Verena’s competes directly with 16 brands of imported tomato-based sauces on the domestic market.

Grace Kennedy imports three kinds of ketchup into Belize [1] the glass bottles of Grace brand from Jamaica [2] the glass bottles of Caribbean Choice brand from Jamaica [3] the squeeze bottle Grace brand which is manufactured for them by the Regia company in Guatemala and imported into Belize. So happens….that Regia also exports their own brand of tomato ketchup into Belize…in the same bottles used for the Grace brand…and sells it at a lower price than Grace….growing its market-share in Belize….while Grace market-share is falling. Guatemala ONE…..Belize/CARICOM NIL…..LOL

Belize no longer manufactures cigarettes……yet the Government of Belize maintains the high rates of import duties….protecting the Trinidad-based industry from international competition….and obviously the importers who control the Belize market….who are movers and shakers in this little poverty-stricken country.

Verena’s has been trying to convince the Government of Belize to raise the tariff on imported tomato-based sauces from the existing 20%, to the CSME-allowed bound-rate of 60%….for a temporary period….reducing it over five years back to the 20%. During this time, Verena’s would scale up using its domestic market position….creating efficiencies of scale that would allow it to compete sustainably on regional export markets. Of course, others could also use this position to invest in Belize!

Yet….the Government of Belize officials argue that they cannot do this….they make vague comments about WTO and CSME treaties binding their hands…that the “trend” is towards reduction of import duties, not increases….yet they make no reference to which articles of those treaties make up such obstacle. They give us the run around….send us from office to office….talking to this one and that one….and getting nowhere.

The truth of the matter….is that the customs revenues flowing from cigarette trade and imported tomato-based sauces is so sweet for the GOB and its political allies….that they do not care if Belize manufactures more of what it consumes…and create employment for its people. In fact, we the people have put the importers in full control of our government ….its policies…and its “development institutions”.

The greed of the importers does not allow them to see…..that this policy of giving advantage to imports….is running our country into greater debt… our imports are consistently double our exports….and the gap is ever increasing….not even the gift of crude oil discovery could breach this widening gap. Importers greed and need for instant gratification, does not allow them to see….that if the people were fully employed…..and our population mostly middle-income earners…..that they would be in a much better position. WIN-WIN for all of us. But no….the greed is insatiable.

The importers have sought to convince us that we can make up the shortfall in exports vs. imports… expanding our services sector. They have pushed us towards become more servants of the tourism industry….they are pushing to bring more call-centers and other such “exportable services”…..all of which are cost-driven and unstable income earners. And guess what…..we have heard this since Independence in 1981…..and we are sliding further and further down the road of unemployment, poverty and crime.

The question today is: If we give up the protection for foreign manufactured cigarettes, for the protection of domestic manufactured tomato-based sauces….will we be better off?

I say….we need to give up neither!!! We can enjoy the fruits of both…..all of us can win.

However, if we had to choose, which would you say is better to protect?

One thing we know for sure…is that protection of our domestic industries…have allowed us to start and build manufacturing of beers, soft drinks, juices, rum, hot pepper sauces, corn, rice, beans, vegetables, fruits, meats, chicken, eggs, animal feed, sheet metal, windows and doors, wooden furniture….a very narrow set of successful industries. Without protection…none of these industries would exist today.

Belize will manufacture more of what it consumes….if we expand our protection of more of our industries….within what is allowed by our treaties.

The special interests of the importers and their multinational suppliers have turned ‘protection’ into a bad word in Belize and around the world. That is why we don’t even protect our children….we don’t protect our families in our homes….we don’t protect our friends….we don’t protect our neighbors….we don’t protect victims…we don’t protect our territory….we don’t protect our citizenship….we don’t protect anything…..we are blind with our greed.

Good morning!!!…..quo vadis Belize???

Richard Harrison is a local businessman and investor in the manufacturing and service industries. Send comments to [email protected]

The Belize Times