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Travellers says proposed $9M loan to Premium Spirits is “high risk”

HighlightsTravellers says proposed $9M loan to Premium Spirits is “high risk”

BELIZE CITY, Thurs. Nov. 16, 2023

Heavyweight in the liquor industry in Belize, Travellers Liquors has not wasted time in recording its objection to the proposed loan by the Social Security Board (SSB) to Belize Premium Spirits and Liquors Limited of BZ$9 million to build a distillery. The plan is for the products that Premium Spirits produces to then be exported to duty free shops in Mexico. Well, in its objection submitted to the SSB – which appears to have been leaked – Travellers, who remarks that it has 75 employees, says that is not how things work, and affirms that the Premium Spirits proposal is therefore high risk. Travellers states, “As an exporter for over 15 years, we know that importers do not sign contracts to purchase liquid before having a sample and an idea of the price of the product. Investing in such a venture with the prospect of exporting even with the best estimates will not guarantee a sale of the spirit once produced.”

Travellers, which has been in the business for over 70 years, says it is aware of the risks of the export market and the competitiveness for rum on the world market. Their communication further highlights, “We are aware as well of the barriers placed by Mexico for the importation of rum, especially from Belize. The Secretaría de Hacienda y Crédito Público has a restriction and allows alcoholic beverages to be imported only through certain border points, and the border between Mexico and Belize is not one of them.” As such, Travellers notes that it would be in the best interest of the SSB fund for that restriction to be lifted first before it seeks to invest in such a project.

Travellers has also indicated that as a company, they themselves have been approached by potential Mexican buyers, but the huge transportation cost (having to ship to a port that is approved to receive spirits) makes it expensive and not competitive enough.

Travellers closes its communication to the SSB by stating that “these obstacles to export to Mexico would pressure the Belize Premium Spirits & Liquors Ltd. to sell locally, which would increase the over-saturated local rum supply, adding a 5th distillery to the market with 3 of them being in the Orange Walk District.” Travellers considers Premium Spirits’ business plan speculative, which would place the $9 million of SSB funds at risk.

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