Joseph: 'Ripple effect may extend to consumers'

A surge in alcohol prices has come after increased excise duties on spirits, beer and tobacco by the government during the budget presentation on October 13.

President of the TT Coalition of Services Industries (TTCSI) Dianne Joseph told Newsday the decision has sparked a discussion about both industry sustenance and public health.

"The move appears to focus on curbing harmful alcohol consumption while boosting government revenue, but manufacturers may encounter operational challenges and inevitable price increases," Joseph said.

With its potential to reduce alcohol consumption and by extension, the accidents, violence and diseases associated with it, may seem like a win-win situation for public health; however, Joseph said the industry impact must still be considered.

"Companies like Carib and Angostura are significant employers and face substantial cost pressures. To sustain operations and preserve jobs, these companies are likely to have little choice but to pass the added cost on to consumers. In fact, any attempt to absorb the new duty through smaller, unsustainable price increases may be unviable for major, well-established firms.

"The ripple effect may extend to consumers and the wider hospitality industry.

"Individuals who regularly purchase these items may have to either moderate their consumption or bear the higher costs."

She said that includes an increase for hosting events and event tickets.

"For those hosting events, the increase will almost certainly translate into higher prices for attendees.

"This could lead to consumers prioritising essential goods and services over discretionary spending on alcohol," Joseph said.

CEO of ADM Import and Export Distributors Ltd and Mayor of Arima, Balliram Maharaj, said the decision came as no surprise.

"Governments always use these two items to generate their revenue; it’s a precedent set. The size of the increases may be slightly more this year, but you have to understand the decline in the foreign exchange."

He said with the optional nature of alcohol and cigarette products and no significant rise in basic food products, he felt the decision was fair to consumers.

During the budget presentation, Finance Minister Davendranath Tancoo said that excise on spirits would increase from $79.25 to $158.50 per litre of pure alcohol, and beer duties from $5.14 to $10.28.

Cigarette excise went from $5.26 to $10.52 per pack of 20, effective immediately under Legal Notice No 376.

These changes were applied to local products first.

Following this, local companies Carib Brewery and Angostura announced sharp price increases.

Suggested retail prices for Carib, Stag and Pilsner rose to $13 per bottle, from around $10.

The suggested price for a 750ml bottle of Angostura 1919 rose to $349.99 from $299.99, while a 750ml White Oak is now $154.99 and the 1.75L size is $334.99.