Eliz­a­beth Gon­za­les

To­ba­go Cor­re­spon­dent

To­ba­go bar and restau­rant own­ers are warn­ing that the sud­den in­crease in al­co­hol prices fol­low­ing Mon­day’s Na­tion­al Bud­get could af­fect spend­ing dur­ing next week­end’s To­ba­go Car­ni­val cel­e­bra­tions, with some al­ready see­ing signs that cus­tomers may switch to cheap­er drink op­tions.

Oth­ers say they have no choice but to raise their prices to sur­vive, while at least one busi­ness own­er says he will ab­sorb the ad­di­tion­al cost to pro­tect his Car­ni­val brand.

The con­cerns fol­low the Gov­ern­ment’s an­nounce­ment of an in­crease in ex­cise du­ties on al­co­holic drinks with im­me­di­ate ef­fect fol­low­ing the Bud­get’s read­ing. Al­co­hol im­porters and dis­trib­u­tors ad­just­ed their prices as ear­ly as Tues­day, and the in­crease has now reached the shelves of To­ba­go bars.

Mount Irvine Ho­tel gen­er­al man­ag­er and di­rec­tor of the To­ba­go Ho­tel and Tourism As­so­ci­a­tion, Al­pha Lorde, yes­ter­day said the al­co­hol du­ty hike is al­ready rais­ing whole­sale costs for busi­ness­es, forc­ing them to re­vise their pric­ing to re­main vi­able.

“The in­creas­es are with im­me­di­ate ef­fect, so we ob­vi­ous­ly have to re­view how does that im­pact our abil­i­ty to sell at the price that we’re sell­ing at, or do we have to in­crease the prices. And in a lot of cas­es, we do have to in­crease the prices,” he said.

He said the cost of sup­ply­ing beer has al­ready risen from this week.

With op­er­at­ing ex­pens­es al­so ris­ing, Lorde said busi­ness­es can­not con­tin­ue ab­sorb­ing fi­nan­cial loss­es while try­ing to main­tain cus­tomer loy­al­ty.

“With the over­heads for the op­er­a­tion here, we can’t con­tin­ue to eat the cost of that mar­gin re­duc­tion, so yet again, prices are go­ing to go up,” he said.

Lorde ex­plained that al­though the full im­pact may not be seen im­me­di­ate­ly due to Car­ni­val and Christ­mas spend­ing, leisure con­sumers may re­duce their al­co­hol con­sump­tion in the new year.

“We’re just at the cusp of the To­ba­go Car­ni­val sea­son, then straight in­to Christ­mas, New Year, so we may not see the im­me­di­ate im­pact un­til the fes­tiv­i­ties are over. But I’m cer­tain there is go­ing to be some re-look­ing of per­son­al ex­pen­di­ture from per­sons, and we may see some re­duc­tion in con­sump­tion ac­tiv­i­ties,” he said.

He said To­ba­go al­ready faces high­er im­port and trans­port costs com­pared to Trinidad, and this new tax in­crease would make busi­ness even more ex­pen­sive on the is­land.

“The cost of op­er­at­ing in To­ba­go has al­ways been some­what greater than op­er­at­ing in Trinidad,” he said.

“The economies of scale that you might get in Trinidad, you’re def­i­nite­ly not go­ing to get it here. It’s a cost to Carib to get their prod­uct here that is greater than get­ting it to about any busi­ness place in Trinidad.”

He not­ed, “Now with the du­ties in­crease, you’re go­ing to see prices go up. It’s just un­for­tu­nate, but prices will have to go up to match the cost of that du­ty in­crease.”

How­ev­er, not every busi­ness is will­ing to pass on the in­crease to cus­tomers—at least not be­fore Car­ni­val. Moon Over Wa­ter bar own­er and J’Ou­vert band­leader, Ri­car­do Max­imin, said he will hold his prices for pa­trons even if it means tak­ing a fi­nan­cial hit.

“What I can say to the pa­trons, even though the al­co­hol and beers have al­ready gone up, I will not in­cur this price in­crease on­to the rev­ellers. So, the pack­age will re­main as is,” he said.

He said pro­tect­ing cus­tomer loy­al­ty is more im­por­tant than rais­ing prof­it mar­gins dur­ing Car­ni­val week­end.

“To spring that on the pub­lic now, you know, bet­ter to take that bur­den of the ex­tra cour­tesy drinks than to lose the pa­trons al­to­geth­er,” he said.

Max­imin be­lieves drink­ing habits may change in re­sponse to the al­co­hol tax, but con­sump­tion will not stop com­plete­ly.

“Peo­ple might be drink­ing what they could af­ford. They might drink more, but cheap­er prod­ucts,” he said.

“Over the years, cig­a­rettes and al­co­hol al­ways go up and con­sumers al­ways find a way to still con­sume,” he added.

For some small restau­rant and bar own­ers, the new prices are putting fi­nan­cial pres­sure on al­ready thin prof­it mar­gins.

Biswa­jit Bak­shi, own­er of Bago’s Restau­rant and Lounge, said the in­crease has cre­at­ed un­cer­tain­ty among busi­ness own­ers and cus­tomers.

“It will be an im­pact on us as a bar and restau­rant own­er, but still we have to fol­low the laws. We have to fol­low the rules,” he said.

He added that busi­ness own­ers are re­ceiv­ing no help from sup­pli­ers.

“We are not get­ting a dis­count from com­pa­nies like Carib or any oth­er com­pa­nies, but we have to buy from them and we have to sell it in the mar­ket,” he said.

Bak­shi said some cus­tomers will re­sist pay­ing more.

“We don’t know if cus­tomers will ac­cept that, but we have to buy it,” he said.

With To­ba­go Car­ni­val ex­pect­ed to draw thou­sands of vis­i­tors next week­end, the bar own­ers said they are now wait­ing to see if the rise in al­co­hol prices will af­fect sales or spend­ing be­hav­iour at bars, fetes and lo­cal restau­rants.