Home' Trinidad and Tobago Guardian : November 15th 2015 Contents NOVEMBER 15 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
COVER STORY | SBG5
It s no fun being in the middle. Heineken, Molson Coors
and Carlsberg are storied brewers that trace their roots
back hundreds of years and have loyal drinkers around
the world. But the merger of their two biggest competitors
leaves such mid-size brewers without a clear way for-
They find themselves squeezed between a Goliath that will
produce almost a third of the world s beer and a growing army
of craft brewers.
Some experts say the mid-sized brewers should respond by
pursuing takeovers of their own. Others argue that would do
little good because the underlying problem is that consumers
are increasingly drinking craft beers, not mass market brands.
"There are so many craft beers out there," said Jonny Forsyth,
a global drinks analyst at Mintel. "They can t buy them all up."
Discussions about world domination heightened Wednesday
when Budweiser maker Anheuser-Busch InBev agreed to buy
SABMiller for £71 billion (US$107 billion). That combination
would account for 29 per cent of the world beer market, making
it three times bigger than its nearest rival Heineken, with a mere
nine per cent, according to the market data firm Euromonitor.
Beer makers looking to bulk up in response will have few
options because some of the likely targets are privately held and
not interested in selling, said Jeremy Cunnington, the senior
alcoholic drinks analyst for Euromonitor.
"There isn t that much else to buy or acquire," Cunnington
Heineken NV has public shareholders, but the family owns
50.5 per cent of the shares, "retaining family involvement and
vision." Carlsberg is also controlled by a foundation, which has
75 per cent of the votes.
To ease regulatory concerns in the United States, SABMiller
will sell its 58 per cent stake in a venture with fellow brewer
Molson Coors for US$12 billion.
But AB InBev would still be the No 1 player in North America
as well as Australasia, Latin America, the Middle East and Africa.
In Europe, it would lag behind only Carlsberg in the east and
Heineken in the west, according to Euromonitor.
AB InBev was attracted to the deal because it wants to grow
sales through SABMiller s brands in Africa and Asia, where
drinkers are expected to increasingly buy brand beers as their
In developed markets, by contrast, the big companies are
seeing sales decline and trying to fight off an onslaught of craft
brewers. Consumers, bored with the previous offers, began fleeing
the big brands in the 1980s in favor of more complicated craft
"Beer drinkers ... these days are far less brand loyal," said
Duane Stanford editor of Beverage Digest. "There s a lot of room
Beer companies have tried to counter the trend by buying
craft brewers. They have also tried to replicate what the craft
brewers have done or at least evoke their ethos. Carlsberg, for
example, calls their founder "probably the first hipster," and said
he opened his first micro-brewery in 1847.
AB Inbev s deal is far from completion, facing regulatory
hurdles in the United States, China and South Africa. Craft
brewers are among those watching things closely.
The Brewer s Association, the trade body for America s 4,000
small and independent breweries, urged the Department of
Justice and Congress to closely examine the merger s "potential
effects on the US marketplace and American consumers."
"The beer drinker wants variety. (Beer drinkers) want choice.
They want quality. They want authenticity. All of those things
are delivered by the American craft brewer," the association s
CEO Bob Pease said as he described his concerns.
Ironically, the craft brewers should want the new combination
to be as big as possible, argues Erik Gordon of the Ross School
of Business at the University of Michigan. That s because
economies of scale discourage behemoths from doing niche and
special run beers, "leaving those spaces open to the craft brewers,"
"In the US, the test of a merger is not its size considered
alone," Ross said. "It is the potential effect on competition and
therefore on prices." AP
With the exception of Windward Islands
Bank and Banco Di Caribe, Canadian institutions
have a dominant presence. "I don t think banks
here are set up, willing or able to assist a small
business or medium-size business to expand,
in terms of offering certain facilities," declares
Stanley Lint, vice chair of the St Maarten Cham-
ber of Commerce & Industry.
"This is a discussion I have several times
with my friends within the industry. It all comes
down to one answer: it is not local! The main
office that sets the rules and criteria is some-
where else. We need locally-owned and operated
banks that understand the culture and envi-
ronment, and can assist small entrepreneurs
with starting and growing their business."
On the flipside Lint feels, "small businesses
many times have a great idea, know how to
work hard and sell their product or services,
but they don t know how to manage the busi-
ness or finances. That could be a reason why
banks are reluctant to finance smaller opera-
The Chamber of Commerce (www.cham-
berofcommerce.sx) registers all businesses and
offers insights to startups and investors. Recently,
the Chamber created a business centre that
can help "educate entrepreneurs on how to
"If you re coming to set up a company, gov-
ernment will welcome you with open arms. If
you re coming to work that s the difficulty,"
attests Brenda Wathey, managing director of
Artemia Event Planners (www.artemia-
sxm.com). "We re only 37 square miles. We
can t continue accepting people from abroad
who are labourers or workers."
To curb the 11 per cent unemployment rate,
government assesses whether service providers
with similar skills already exist on the island
(www.sintmaartengov.org). For investors gov-
ernment has implemented measures to expedite
the processing of business permits and managing
director licenses, according to Wathey. "The
one good thing, after you get your permit and
licence, you get status to live here. It makes
sense because you can t own a business here
and not live here."
In October 2014, the Port of St Maarten
hosted the 21st Annual FCCA Cruise Conference
and Trade Show, one of the largest cruise indus-
try conferences. "We exceeded expectations,"
adds Wathey. "Government had to invest in a
temporary structure to house the conference.
Occupancy at most hotels tops at 600-800;
there is an opportunity for a conference arena
to be built." More rooms and a state-of-the-
art concert hall could expand their reach into
the incentive travel market.
While St Maarten Nectar cosmetics, Topper s
Rhum and a variety of Guavaberry products
are manufactured on a small or medium scale,
there are not enough natural resources to sustain
manufacturing at a level that could significantly
influence the GDP (ppp) of US$798 million
(2010 est) (www.stat.gov.sx).
"There are farmers starting to do little projects,
though land is limited and the terrain isn t very
conducive to agriculture," observes Wathey.
"When you see Coca-Cola they distribute here
but they don t bottle here, we would have to
Wathey estimates that 80 containers arrive
weekly to deliver produce. "Shipping is very
competitive as 99 per cent of everything sold
here is shipped in. Most shipping companies
are locally owned," said Lint, who has 10 years
in the industry and is managing director at
STM NV, a freight forwarding company. "It is
a good industry to be in." He advises newcomers
to avoid undercutting the market too much
just to attract business. "It s difficult for those
who are established to go back to market levels."
"We re establishing St Maarten as a sub-
hub to the region," notes Lint. "We have major
shipping lines coming here. St Maarten is ideal
for persons who want to do business in the
region but need a base." Twenty-two scheduled
airlines serving 34 destinations directly is the
sort of impressive factoid that gives St Maarten
stakeholders leverage for courting new invest-
Representatives of the chamber recently vis-
ited Miami and Panama to showcase the pos-
sibilities of working via St Maarten to cover
the region, Lint said. "We are now focused on
Trinidad, Antigua, Barbados, St Lucia and
While labour isn t cheap, appealing real estate
costs help to attract luxury brands such as
Michael Kors, which opened last October. "My
rent on the Boardwalk is U$2,800 monthly for
700 square feet, very reasonable," shares Gio-
vanella De Weever, owner of Island Blush
(www.islandblush.com) boutique and wholesale
company. Cruise ships dock near the picturesque
beach at her shop s doorstep. "On Front Street
rent is U$5,000 and up. Rental properties have
decreased in the last two years," she adds.
De Weever recently franchised her business
and started a private label for her nail polish,
perfume and chapstick inspired by St Maarten s
alluring beaches. In the Dominican Republic,
she discovered, "a law (permits) only US$250
you can use online to bring merchandise into
the country, above that it s taxed at a higher
rate. That encourages you to shop in your local
economy. We want to offer the same price they
Lint said: "We should focus on developing
telecommunications, marine industry, banking
and education. The environment for banking
and doing business in St Maarten is very com-
fortable and safe."
In the meantime, "We re a one pillar economy,
our industry is tourism. We re blessed that St
Maarten is such a beautiful island," affirms
Wathey, an event manager for the illustrious
Heineken Regatta and a member of the country s
leading business family.
"Don t get me wrong, St Maarten has made
a lot of money for people who are not necessarily
from St Maarten. They ve set up businesses
selling liquor, cigarettes, food and beverage.
While we may not have the ability to produce
those things, the consumption rate is through
the roof. The potential for growth and to do
well in St Maarten is huge."
Resourceful Web sites:
SXM official Web site:
SXM Small Business Development
SXM Hospitality and Trade Association:
Big beer merger leaves future uncertain
From Page 4
As the world's largest beer company AB InBev completed last week's US$107 billion acquisition of the second largest beer company, SABMiller, lawyers in Barbados were
preparing to fight over an injunction blocking the sale of Banks Holdings shares---a matter involving AB InBev and T&T's ANSA McAL. Also last week, Heineken was readying its
bid to acquire all of Jamaica's Desnoes & Geddes, the brewers of Red Stripe, having acquired the 57.9-per cent stake in the company that had been owned by Diageo last month.
Stanley Lint, vice chair of St Maarten
Chamber of Commerce & Industry
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