By Monique Hepburn, Staff ReporterWESTERN BUREAU:
CERTIFIED LIQUOR importer Mark Hart, chairman of the Hart Group of Companies, says bootleg liquor is seriously hurting the business of legitimate importers.
He claims that in excess of 90 per cent of the liquor that enters the country, gets in illegally.
"It's well recognised by legitimate distributors that bootleg liquor is dominating the industry," said Mr. Hart, in an interview with The Gleaner on Monday.
"The formal sector of the market covers only about 10 per cent. The balance is brought in illegally through secondary sources."
Mr. Hart also noted that the 'bootleggers' are breaching even the labelling requirements which legitimate importers are required to adhere to by law. "There is a labelling requirement that the formal sector complies with. However, the informal sector is now engaging in labelling products as well."
Mr. Hart believes the Revenue Protection Department (RPD) needs to take urgent steps to put an end to the bootlegging business: "What the Revenue Protection Department should do is to trace the source of importation of these items to curb this trend." he said.
CHEAPER SOURCES
According to Larry Watson, managing director of Wray and Nephew Limited, a major liquor distributor, there has been a longstanding situation of 'parallel distributors' in the market. These distributors "often distribute liquor alongside the formal distributor, often sourcing their liquor in countries where taxes are reduced," Watson stated. "The implications are two-fold, as a result of parallel distributors in the system, there is a lack of revenue for formal distributors and the Government."
A recent study by the auditing firm KPMG Peat Marwick was not able to quantify the extent of the revenue loss to the Government on account of the illegal importation of liquor. However, it found that the country's high import costs could be the factor encouraging the corruption in the importation and distribution system.
"The artificial pricing structure has assisted in opening the door to illegal activities such as smuggling, corruption of customs officers and other abuses that result in the loss of revenue to the Government of Jamaica," the study stated.
