The Trinidad and To­ba­go Man­u­fac­tur­ers' As­so­ci­a­tion says that lo­cal busi­ness­es are be­ing de­prived of sales be­cause of il­lic­it trade. The As­so­ci­a­tion stat­ed that a 2014 study showed that as much as twen­ty per cent of key brands of im­port­ed scotch, vod­ka and co­gnac are like­ly to be smug­gled in­to T&T.

The fol­low­ing is a press re­lease from the Trinidad and To­ba­go's Man­u­fac­tur­ers' As­so­ci­a­tion:

“Il­lic­it trade con­tin­ues to de­prive lo­cal busi­ness­es of sales, and every sale counts to keep law abid­ing peo­ple em­ployed and shops open. Il­le­gal sales of al­co­hol al­so de­prive the coun­try of state funds that sup­port our schools, hos­pi­tals, pen­sions, roads and jobs. Prod­ucts sold il­le­gal­ly are not checked or reg­u­lat­ed are a se­ri­ous health risks to con­sumers.

Il­lic­it trade af­fects all con­sumer goods and prod­ucts such as clothes, make­up, al­co­hol, cig­a­rettes, phar­ma­ceu­ti­cals, fash­ion jew­el­ry, food etc. This re­quires a col­lab­o­ra­tive ef­fort with pub­lic and pri­vate sec­tors ad­dress­ing the is­sue with key law en­force­ment au­thor­i­ties to de­vel­op meth­ods to deal with the scourge of il­lic­it trade.”

As much as twen­ty per­cent of key brands of im­port­ed scotch, vod­ka and co­gnac are like­ly to be smug­gled in­to the shores of Trinidad and To­ba­go through il­lic­it means. This is based on a 2014 study pro­duced by glob­al re­search cen­tre Eu­romon­i­tor In­ter­na­tion­al. Ac­cord­ing to the study, il­lic­it al­co­holic bev­er­ages are de­fined as those not com­ply­ing with the reg­u­la­tions and tax­es in the coun­tries where they are con­sumed, re­sult­ing in rev­enue loss, and brand degra­da­tion for le­git­i­mate man­u­fac­tur­ers, as well as re­duced tax rev­enue for gov­ern­ments.[1]

In many coun­tries, con­sumers do not con­sid­er buy­ing il­lic­it al­co­hol to be a se­ri­ous crime, as they per­ceive these pur­chas­es to be “good deals”. In Trinidad and To­ba­go, it was found that the ma­jor­i­ty of il­lic­it al­co­hol is sold and bought dur­ing the Christ­mas pe­ri­od through for­mal chan­nels such as su­per­mar­kets, whole­sale dis­trib­u­tors, liquor stores and shops.

Nicholas Hospedales, Di­rec­tor of Pre­mi­um Bev­er­ages at A.S. Bry­den & Sons ac­knowl­edged the sever­i­ty of the is­sue and said all gen­uine prod­ucts such as John­nie Walk­er Scotch Whisky, Black & White Scotch Whisky, Ab­so­lut Vod­ka and Hen­nessy Co­gnac con­tain man­u­fac­tur­er codes to en­sure qual­i­ty, or if need­ed, to make a re­call, but il­lic­it traders re­move prod­uct codes be­fore it ar­rives in­to the coun­try, mak­ing the ship­ment un­trace­able. He said, “The prod­ucts are sourced through the grey mar­ket where op­er­a­tors re­move the prod­uct codes, and it is then smug­gled through du­ty-free ports like Pana­ma, St. Maarten or Cu­ra­cao, and sold in su­per­mar­kets and so on.” He not­ed two years ago a lo­cal su­per­mar­ket brought in cas­es of John­nie Walk­er Black and Hen­nessy to sell, but the man­u­fac­tur­ers’ codes had been re­moved. The re­moval of the codes meant that the prod­uct la­bels did not meet the stan­dards of the Chem­istry, Food & Drug Di­vi­sion of the Min­istry of Health and the prod­ucts were re­moved from the shelves.

In an­oth­er ex­am­ple, Mr. Hospedales said sev­er­al years ago the home of a Port of Spain mer­chant was raid­ed and in their search po­lice of­fi­cers found huge quan­ti­ties of con­tra­band liquor. The own­er was ar­rest­ed and fined TT$10,000 and banned from ob­tain­ing a li­cense, “The own­er could no longer sell al­co­hol, so what did he do? He ap­plied for a liquor li­cense un­der a fam­i­ly mem­ber’s name and op­er­at­ed as nor­mal from there­on.” He said this is “a slap on the wrist” for the il­lic­it trad­er and un­fair to le­git­i­mate busi­ness­es every­where. 

The ef­fects of il­lic­it trade on the al­co­hol in­dus­try in Trinidad and To­ba­go has been de­bil­i­tat­ing, Hospedales not­ed, and it has not on­ly af­fect­ed prof­it mar­gins, but ad­ver­tis­ing, spon­sor­ship, and pro­mo­tions. He said, “All the work we have done to make our brands (like JWB) what they are, is be­ing ful­ly un­der­mined. The im­pact on the coun­try is sig­nif­i­cant as a re­sult of lost tax rev­enue. In 2014, Eu­roMon­i­tor In­ter­na­tion­al es­ti­mat­ed the loss­es to be ap­prox­i­mate­ly US $8.6 mil­lion in Trinidad and To­ba­go, how­ev­er that was be­fore our lo­cal tax in­crease in 2016 so now it is prob­a­bly sig­nif­i­cant­ly high­er.”

Mr. Hospedales, who has over 14 years of ex­pe­ri­ence in the lo­cal al­co­hol dis­tri­b­u­tion mar­ket, says now is the time to gen­er­ate mean­ing­ful con­ver­sa­tions with agen­cies such as the VAT Of­fice, Board of In­land Rev­enue, Po­lice Ser­vice, Cus­toms and Ex­cise Di­vi­sion, Chem­istry Food & Drug Di­vi­sion in or­der to form a co­he­sive ap­proach in tack­ling the scourge of il­lic­it trade. He is sug­gest­ing four ap­proach­es – 1) re­assess the du­ty struc­ture, 2) re­view the in­ter­nal process­es of the Cus­toms and Ex­cise Di­vi­sion to en­sure the con­tain­ers are cor­rect­ly screened and the as­so­ci­at­ed con­signees are red flagged, 3) re­vi­sion of the laws to en­sure the penal­ty match­es the crime and 4) en­sure en­force­ment of the ex­ist­ing laws and of­fi­cers are trained to dis­tin­guish con­tra­band from gen­uine goods. Mr. Hospedales said this sur­mount­able task which could be done pos­si­bly through the es­tab­lish­ment of a Rev­enue Au­thor­i­ty.

Agree­ing with the state­ment that in­creased co­he­sive­ness is need­ed amongst state agen­cies, Dar­rin Carmichael, Board Di­rec­tor of Crime Stop­pers Trinidad and To­ba­go said, “Our col­lec­tive goal must be to re­duce il­lic­it trade by mak­ing it hard­er – deny­ing traf­fick­ers ac­cess to trans­porta­tion, putting up bar­ri­ers to their il­le­gal ac­tiv­i­ties, and hold­ing peo­ple and busi­ness­es ac­count­able for their ac­tions, and those who look the oth­er way, or spend the il­lic­it pro­ceeds of these crimes, must be held to ac­count.”

Ac­cord­ing to Mr. Carmichael, one of the most per­va­sive forms of cor­rup­tion and crim­i­nal­i­ty in the world is il­lic­it trade. He stat­ed, “To us here in Trinidad and To­ba­go, il­lic­it trade strikes at the heart of our na­tion­al se­cu­ri­ty with our vul­ner­a­bil­i­ty with our open coast­line. It rec­og­nizes nei­ther na­tion­al bor­ders nor na­tion­al in­ter­ests, dis­torts eco­nom­ic de­vel­op­ment by de­priv­ing our coun­try of du­ties and tax­es.”

One of the man­dates of Crime Stop­pers Trinidad and To­ba­go is to in­crease aware­ness of il­lic­it trade and en­cour­age mem­bers of the pub­lic to give in­for­ma­tion anony­mous­ly. To this end, a stake­hold­ers’ group has been es­tab­lished com­pris­ing im­porters, ex­porters, sup­pli­ers, and busi­ness­es.

This group will be sup­port­ed by an op­er­a­tional joint task­force com­pris­ing the Trinidad and To­ba­go Man­u­fac­tur­ers As­so­ci­a­tion, and mem­bers, the Trinidad & To­ba­go Bu­reau of Stan­dards, In­tel­lec­tu­al Prop­er­ty Of­fice, Crime Stop­pers Trinidad and To­ba­go, Cus­toms and Ex­cise Di­vi­sion and the Trinidad and To­ba­go Po­lice Ser­vice which is head­ed by Deputy Com­mis­sion­er of Po­lice Jayson Forde. Mr. Carmichael not­ed that while the work of the joint task force may have been im­ped­ed due to the COVID-19 pan­dem­ic, busi­ness­es rec­og­nized that il­lic­it traders used this op­por­tu­ni­ty to in­ten­si­fy their ac­tiv­i­ties by adopt­ing il­lic­it im­ports and tak­ing ad­van­tage of the cri­sis. He said it ranged from sell­ing in­fe­ri­or/sub­stan­dard face masks, PPE wear and phar­ma­ceu­ti­cals and is tes­ti­mo­ny to how ruth­less these crim­i­nals can be.

Once the task force is up and run­ning, Carmichael said it will draw on ex­ist­ing in­for­ma­tion, iden­ti­fy gaps in knowl­edge, and com­mis­sion re­search and ac­tions to plug the gaps. It will al­so call on com­pa­nies to im­ple­ment a “ze­ro tol­er­ance” pol­i­cy to­wards il­lic­it trade.

Glob­al­ly of the 42.3 mil­lion HL LAE (hec­tolitres of al­co­hol equiv­a­lent) of to­tal al­co­hol con­sumed each year, ap­prox­i­mate­ly 25.8% is il­lic­it. In oth­er words, near­ly 10.9 mil­lion HL LAE of il­lic­it al­co­hol is con­sumed an­nu­al­ly in 24 coun­tries in­clud­ing Latin Amer­i­ca, the Caribbean, Africa and East­ern Eu­rope.[2]