Report on Organization of Eastern Caribbean States

Export Guide to the Consumer Food Market

September 1997

Prepared for the U.S. Department of Agriculture

by Fintrac Inc.

This guide is one of ten individual guides available (not including a summary guide), covering the following countries and territories: Aruba and Curacao; the Bahamas; Barbados; British Territories, comprising Anguilla, the British Virgin Islands, the Cayman Islands, and the Turks and Caicos; the Dominican Republic; Guadeloupe and Martinique; Haiti; Jamaica; and the Organization of Eastern Caribbean States, comprising Antigua and Barbuda, Dominica, Grenada, St. Kitts-Nevis, and St. Vincent and the Grenadines.

For more information, contact USDA/FAS offices in the Dominican Republic and Miami:

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Table of Contents

Basic Facts (Geography, Demographics, Infrastructure)

The six independent island nations of the OECS⁽¹⁾ are located in the Eastern Caribbean Sea stretching from roughly due east of Puerto Rico in the north (St.Kitts and Nevis, Antigua) to the eastern coast of Venezuela in the south (St. Vincent, Grenada). The total population of the OECS is just over half a million, with the following distribution and per capita GDP:

The economies of the OECS member states are based on a mixture of tourism and agriculture. All of the countries except St. Kitts and Antigua are reliant on bananas for a significant portion of export earnings and are worried about the consequences of a loss of preferential access to the European banana market. All of the OECS countries are trying to expand their tourism industries in order to diversify their economies. Below is a breakdown of the tourist sectors of each country:

Over 95 percent of the population are of African or of mixed African-European heritage. The rest of the population is descended from Europe, India, and the Middle East. There are several thousand expatriates from the United States, Canada, and Europe permanently residing in the OECS, including 800 American medical school students on Grenada.

The currency of the OECS is the Eastern Caribbean dollar. The official language of all the OECS islands is English, though there are local patois which are widely spoken on certain islands.

All of the OECS countries have deep water harbors and ports capable of handling large ships. St. Lucia has two such ports, one at Castries, and one at Vieux Fort. Most food imports come by boat, though a limited amount of fresh products arrive via air. Shipping lines include Bernuth Lines, Caribbean Steamship Company, CGM Interline, Crowley American Transport, Harrison, Seaboard Marine, Tecmarine, and Tropical Shipping. Leeward Islands Air Transport (LIAT), which utilizes small turboprops, is the main regional air carrier. Other airlines serving the region include American Airlines, American Eagle, Air Canada, BWIA, and British Airways. Main international airports are located in Antigua, St. Lucia (one each in Castries and Vieux Fort), and Grenada. Air service is more limited to St. Kitts, St. Vincent, and Dominica, although all three have jet cargo service. Roads are of varying quality depending on the island.

Consumer Trends and Attitude Towards Imports

With the exception of Antigua, all of the OECS countries have a significant proportion of the population involved in agriculture. These people, who live in the countryside, generally buy their food products from small 'counter shops' in the villages or at open air markets. Because their income is limited, price is a big factor in their decision-making. Food products from CARICOM countries generally do well in this environment, as they are essentially duty free while products from outside of CARICOM attract high tariffs. It is estimated that at least 40 to 50 percent of total retail food sales in the OECS go through these counter shops.

The supermarkets are generally located in the capital (always the largest) city and cater to the entire population. With the exception of the Epicurean in Antigua, the selection of high value or gourmet items is at a minimum, with staples such as frozen chicken, juices, canned products, rice, flour and dairy products accounting for the majority of sales. Although more supermarkets are beginning to carry fresh fruits and vegetables, most people still buy their produce at outdoor markets.

Women do most of the food shopping in the OECS, and shopping is usually quite frequent, perhaps several times a week, because of the short distance to market.

Consumer attitudes towards imported food products are generally positive, as agricultural production (especially of processed foodstuffs) is extremely limited in the OECS. Cable television has made inroads into every village, with mostly US programming and commercials, so OECS consumers are knowledgeable about US brand-name products. While many dismiss the OECS as being entirely a price-oriented market, many importers see the effect that this American advertising has had on the local population. In one instance, an importer reported a huge increase in demand for a certain fruit juice after commercials for this product aired repeatedly on television. In addition, many middle class people from the OECS countries have traveled often to the US and/or Europe, and are therefore familiar with the latest food trends.

The Wholesale Food Sector

Most wholesale food distribution in the OECS is carried out by agent-distributors, who import products directly from manufacturers, and in turn sell to smaller wholesalers, supermarkets, grocery stores and counter shops, as well as the HRI (hotel, restaurant, and institutional) trade. Usually, there are five or fewer major distributors per island. These distributors are generally well-established companies on their respective islands, often owning the major supermarkets. In some cases, such as with the Bryden and Brisbane group of companies, the distributors are the descendants of British-established trading companies and have a presence on many islands in the Caribbean. Some wholesaling is also done by other, smaller wholesalers, as well as supermarkets.

Representation contracts generally are not strict about non-competition. Though in some cases manufacturers with diversified product lines may require a non-competition agreement as a requirement for being their agent, more often companies realize that an island distributor must often carry competing brands if he is to survive in such a small market. So-called 'parallel trading', where importers bring in product directly from a US (usually Miami-based) wholesaler/consolidator and bypass the island representative of that product, is common. Some distributors complain about parallel trading, but others claim they have no problems competing on price with the Miami-based wholesalers.

Most of the distributors' focus is on dry goods; they may carry fresh and frozen products but these are often handled by other, more specialized importers. Liquor importation and distribution also tends to be specialized, although some of the large food distributors also carry wines and spirits.

Each distributor has at least one warehouse as well as trucks or vans to distribute product throughout the island. Distribution in the capital is pretty straightforward. The dock, the warehouse, and all the supermarkets may all be within a few square miles. Distribution to the countryside requires a constantly circulating fleet of trucks which sell on a cash and carry basis to small shop owners.

Though some wholesalers report seeing a trend towards more direct importing by supermarkets and restaurants, most feel their positions are secure. This is especially true of the large, well-established agent-distributors, many of whom are confident that their smaller competitors have neither the expertise nor the capital to offer them much competition. On the islands with especially strict price controls (Antigua and St. Lucia), medium-sized wholesalers reported feeling squeezed and complained that their larger competitors were better treated. Large companies, on the other hand, complained about parallel trading and falsification of invoices by less well-established companies in order to avoid duties.

On the whole, however, the same companies have been involved in food distribution in the OECS for many years, and most are expected to remain the major players for the years to come. Population and economic growth for most of the islands is slow, investment in the retail sector is stagnant, and the food market is well-served (many even say over-served) by the existing channels.

Antigua and Barbuda

The largest wholesalers on Antigua are A.S. Bryden and Sons, Anjo, Dew's, Hutchinson, and Goodwill Agencies. All of these companies function as manufacturer's agents and distributors, and together represent most of the major branded products sold on the island. These companies are mostly into dry goods; two other companies, Island Provision and Trans-Caribbean Marketing, tend to focus more on fresh and frozen products. Many of the supermarkets on Antigua also function as wholesalers, selling to other supermarkets, hotels and restaurants.

Dominica

The largest importer-distributors in Dominica are H.H.V. Whitchurch, O.D. Brisbane and Sons , and J. Astaphan's. These companies also run the largest food retail outlets on the island. A.C. Shillingford, Brisin Agencies, and Green's Wholesale are some other well-established island wholesalers. In addition to these companies, there are roughly a dozen smaller wholesalers, many of whom also have retail outlets. Quality Foods and Malcolm Stephens and Sons concentrate on fresh and frozen produce, much of it for the hotel trade. The larger wholesalers distribute product to the hundreds of counter shops through commission salespeople and smaller wholesalers.

Grenada

The largest wholesalers on Grenada are Bryden and Minors, George F. Huggins, Jonas Brown and Hubbard, Independence Agencies, and R.E. Walker and Company. These companies, which act as manufacturers' agents, supply the supermarkets, hotels, restaurants, and counter shops. Huggins and Hubbard own two supermarkets each and are the biggest food retailers on Grenada. They bring in product direct from the manufacturer as well as through Florida wholesalers. Bryden and Minors has an associated company, Gerald Smith and Company, which handles frozen meats and chilled vegetables and is geared more towards hotels than the retail trade.

These few large wholesalers account for an estimated 80-85 percent of Grenada's food imports, with the other 15-20 percent being brought in by smaller wholesalers and supermarkets. Below the large wholesalers, there are approximately 50-60 sub-wholesalers who mainly distribute to the counter shops. Many of these are one-man operations operating out of a car or van.

The food market on the whole is small in Grenada, and the existing wholesalers don't see any great changes in the future. Many hope for further growth in the tourism industry, which will bring more visitors and more demand for imported foods.

St. Kitts and Nevis

There are only a few importer-distributors of any size on St. Kitts. Ram's, which owns three supermarkets, is among the largest, as well as O.D. Brisbane, David Coury and Company, Frank B. Armstrong, and National Supply Company. Ram's and Brisbane have 50,000 and 37,000 square feet, respectively, of warehouse space and each has about 12 delivery vans to carry product to supermarkets, hotels, and counter shops. They also distribute product to smaller sub-wholesalers, mainly for distribution to counter shops. Some of the larger hotel resorts, such as the Jack Tar Village and Four Seasons, do their own importing but most hotels and restaurants buy from local distributors in regular retail-sized packs.

Non-competition agreements are reported to be rare in St. Kitts, as most manufacturers realize it is a small market and companies cannot be realistically expected to make money without offering a good array of merchandise. Parallel imports are reported to be common despite exclusive distributorships, but the distributors say they can usually match or better the prices being offered by the other importers. Despite the appearance of new wholesalers every now and then, the wholesale distribution system is not expected to greatly change as the main players are quite firmly established.

St. Lucia

The largest importer-distributors in Saint Lucia include Bryden and Partners, Peter and Company, Renwick and Company, and J.Q. Charles, all of whom are also manufacturers' agents. These companies, with the exception of Renwick and Company, all carry fresh and frozen products as well as dry goods and supply the HRI trade as well as retail food outlets.

Reflecting St. Lucia's status as the largest tourist economy in the OECS, there are a number of companies which specialize in importation and distribution of fresh produce and frozen meats, fish and poultry. These include St. Lucia Cold Storage, Trans-Caribbean Agencies, Evans International, and Chef's Choice Meats. Most hotels buy locally, though large ones such as the Club Med buy directly from the United States. Club Med in St. Lucia and throughout the Caribbean is supplied by Beaver Street Foods in Jacksonville, Florida.

In total there are about two dozen wholesalers, many of whom purchase product from the larger distributors as well as buying directly, and in turn supply many of the smaller shops on the island. A number of the independent supermarkets also act as wholesalers for customers who buy in large quantities.

St. Vincent and the Grenadines

The largest importer-distributors in St. Vincent are the Goddard Group (comprised of Corea's, Hazell's, and Hutchinson's), C.K. Greaves and Company, and Bryden and Sprott. Corea's and C.K. Greaves also run supermarkets on St. Vincent. Other wholesalers include W.J. Hubbard's, Frank B. Armstrong, and J.G. Agencies. Together, these companies represent most of the manufacturers from the US, Europe, and the Caribbean selling food products in St. Vincent. Several companies, including Lyric Trading, Yammie McConnie, PH Veira, Bonadie's and Standard Grocery, also import food products for sale in their grocery stores as well as for wholesale. Shipments are taken by van to the countryside and by ferry to the Grenadine islands.

Bryden and Sprott is a recently formed company, and many of the staff are former employees of the Goddard Group. Bryden has quickly grown to be one of the major food wholesalers, picking up many distribution contracts from Geddes Grant, who folded their wholesale operations in St. Vincent two years ago.

The Retail Food Sector

There are three general types of retail food outlets in the OECS; supermarkets, smaller supermarkets or mini-marts, and so-called 'counter shops' or 'country stores'. A large supermarket for these islands is anything over 8,000 square feet, which is actually quite small by US standards. Most of these supermarkets carry a range of products from the US, Europe and the Caribbean and have substantial freezer space for frozen meat and poultry. Usually there are only a handful of these kind of stores per island. The larger supermarkets may import directly from consolidators and manufacturers abroad, as well as buying locally from distributors. The supermarkets are often owned by distributors or, if independent, may themselves act as wholesalers to the smaller supermarkets and counter shops.

Smaller supermarkets, or mini-marts, are more numerous than the supermarkets and more likely to be independently owned rather than part of a larger food importation/distribution company. Though most of these stores buy product locally, many also supplement local supplies with direct imports (usually from Miami-based wholesalers) and act as wholesalers in their own right. These stores are basically similar to the supermarkets except smaller, in the range of 3,000-7,000 square feet. Prices are often not appreciably higher than at the larger supermarkets and there may be twenty to thirty of these stores per island.

There are literally hundreds of 'counter shops' per island. Sometimes called 'country stores', these small (often no more than 400 square feet) outlets sell basic goods that are the food staples for many islanders, especially in rural areas but also in the towns. Canned goods, dried and salted meats, flour, rice, and rum are among the items commonly offered by the counter shops. These shops are usually family run and may not be the main source of income for the family. For example, the wife may run the shop while the husband is at work. These small shops may account for as much as half the total food sales in the OECS.

The retail food industry in the OECS is widely agreed to be saturated. There are already a lot of supermarkets for a relatively small number of people, and no major expansions are planned for the future. Some modernization of existing stores is planned, including the addition of scanners and credit/debit card processing equipment. The future of tourism on the islands will largely determine future growth in both the supermarket and the hotel food industries. The most modern supermarkets and vibrant HRI sectors are on Antigua and Saint Lucia, which together account for 70 percent of all the tourist dollars in the OECS. Tourism has been steady, but the consensus on several of the islands is that more investment is needed before growth can take off.

Antigua and Barbuda

The largest supermarkets in Antigua are the Epicurean (2 outlets) and Food City (2 outlets). Both of these companies tend to import directly whenever possible, and both do some wholesaling in addition to their retail business. The stores are modern, with scanners, but the Epicurean has a wide selection of specialty and gourmet items aimed at the substantial expatriate and tourist trade on the island. The larger of the Epicurean's stores has eleven aisles as well as an in-store deli, bakery, and meat and fish departments.

There are several smaller supermarkets which do their own importing (and sometimes wholesaling) as well as buying from island distributors. These include Graham's, Buy-Lo, Christo's, Carib Marine, Island Foods, and Food Emporium, which is owned by Bryson's Distributors. There are twenty to thirty smaller supermarkets on Antigua, in addition to hundreds of counter shops.

The retail supermarket industry in Antigua is said to be saturated. In fact, two of the large island distributors, Dew's and Hutchinson's, recently got out of the supermarket business. Supplying hotels with high value products has been a growth area for the Epicurean, but other hotel suppliers report a steady trade, with no great changes or new developments.

Dominica

Brizee's is the largest supermarket on the island. Located just outside of Roseau in Canefield, this two-year old store is owned by O.D. Brisbane and Sons and has, by all accounts, been quite successful. The next-largest supermarket is Whitchurch, an IGA franchise since November of 1996. The store, which is about 8,000 square feet, has the only in-store bakery and deli on the island and was the first supermarket to carry fresh milk. Whitchurch is also one of the largest distributors on Dominica for products other than IGA private label items, which must sold in their supermarket. J. Astaphan, another of the larger food distributors, has a supermarket comparable to Brizee's and Whitchurch. There are about fifteen to twenty smaller supermarkets and mini-marts, some of which do their own importing and act as wholesalers.

Retailers in Dominica see the trade as becoming more customer-oriented. While still essentially distributor-driven, the industry is becoming modernized through the new Brizee's store and Whitchurch's becoming an IGA franchise. No major expansions are foreseen, however, barring substantial investment in the tourism field.

Grenada

There are only about fifteen supermarkets and mini-markets in Grenada. The largest supermarkets are the two Food Fair outlets, owned by Jonas Brown and Hubbard. The Food Fair supermarkets are each about 8,000 square feet, and have five display bins for a full range of frozen items including meats, poultry, ice cream, vegetables, pizza, etc. Food Fair estimates its share of supermarket sales at 50 percent, with total supermarket sales representing about 60 percent of total island food sales. George Huggins, another wholesaler, has two supermarkets in Grenada as well, called Foodland. Another distributor, R.E. Walker, owns a small supermarket and Gerald Smith operates a warehouse outlet called Bulk Buy, though this is primarily for wholesale use.

The hundreds of counter shops rely on the importer-distributors and their network of smaller wholesalers. Some of the larger wholesalers believe that the counter shops and their smaller suppliers will feel pressure as the supermarkets gradually expand and gain more market share.

St. Kitts and Nevis

Ram's runs the largest supermarket on the island, which is 15,000 square feet. In addition, they have two other supermarkets, one of 10,000 square feet and another of 4,000 suare feet. The other larger supermarkets on St. Kitts are Horsford's Valu Mart, an IGA franchise of 14,000 square feet, and Barker and Kelly, which is about 10,000 square feet. National Supply is a wholesaler which also runs two mini-marts of roughly 5,000 square feet each. All of these markets import directly from the US as well as dealing with local distributors. The Central Marketing Corporation also runs a supermarket, as well as a wholesale business.

There are over thirty businesses listed as supermarkets in St. Kitts, but most of these are on the minimart level. Many of these stores report that they do some direct importing, much of it through Miami wholesalers.

St. Lucia

J.Q. Charles, one of St. Lucia's main wholesalers, also owns the only supermarket chain on the island, with ten outlets island-wide and another one being built in Vieux Fort in the south of the island. The stores are small by US standards, with only about five aisles each, though the new supermarket will be larger.

Julian's is the only other supermarket of any size on St. Lucia, with eight aisles. Julian's imports directly and also acts as a wholesaler. There are approximately forty supermarkets or mini-markets on Saint Lucia, some of which import product from wholesalers in Florida in addition to buying from local distributors. These include Lera's, Caribcan, Dilly's, A.F. Valmont and Glace. Many of the independent supermarkets act as wholesalers.

Julian's, by dint of cheaper prices and good selection, has been quite successful compared to some of the smaller independent supermarkets. J.Q. Charles, because of its buying power, will continue to be the largest food retailer on the island.

St. Vincent and the Grenadines

There are about twenty-five listed grocery stores in St. Vincent and the Grenadines. C.K. Greaves has the largest store, which covers 20,000 square feet, as well as a smaller one which is 7,000 square feet. The larger store is housed in a building which also contains a warehouse and a bakery. Greaves buys from wholesalers in Miami, as well as from local distributors, and acts as a manufacturers' agent. Greaveswholesales to other supermarkets as well as hotels, which often buy retail rather than institutional-sized packs because of their small size. Greaves' supermarket is scanner-ready, but they have not been installed yet as many of the Caribbean products stocked by the store lack bar-codes.

Corea's, one of the island's larger wholesalers, also has a seven-aisle supermarket. There are several independent grocers with small supermarkets and mini-marts (less than 5,000 square feet). These stores are supplied by a combination of local distributors and overseas suppliers, usually consolidators out of Miami such as Fleming International. Beneath the level of these stores are the counter shops, of which there are several hundred in St. Vincent. As on the other OECS islands, these shops are supplied by roving wholesalers operating out of vans.

Business Relationships/Choosing a Partner

Most food distributors in the OECS like their suppliers to become involved to the greatest extent possible in the marketing of their products. Assistance with advertising, consumer education, and point of sale materials are all appreciated. Many importers stress the importance of offering product at a competitive price. While quality and presentation are certainly important, product which is considered expensive has a very small market.

Many distributors in the islands realize that the products they represent may find their way to certain store shelves through another channel, usually Florida-based wholesalers. While they are used to this, many object to what they claim is a common practice of falsifying invoices to help certain importers avoid duties. This is said to hurt legitimate importers and foster an atmosphere of corruption which is bad for business.

The advantages and disadvantages of exporting to a distributor versus directly to the retail outlet or hotel are the same in the OECS as elsewhere in the Caribbean. The issue is basically one of convenience versus cost. Dealing with a distributor can be more convenient than dealing with a number of smaller importers. Most major distributors sell products to a wide array of customers, and the distributor can give assistance with marketing and sales. It is generally advisable to deal with a well-established and reputable company. Many small operators claim to be agents, but are really one-man operations with very limited capital and expertise.

The disadvantage of dealing with a distributor is one of cost to the consumer, as products that pass through distributors generally cost more than those imported directly by the retailer. In the OECS, this situation is less clear-cut as many distributors also own supermarkets and are thus both wholesalers and retailers.

Another alternative is to sell products through US food wholesalers who specialize in servicing the Caribbean market. These companies, most of whom are based in South Florida, may not offer all of the marketing muscle of a local agent, but they are often quite competitive on price. Many Caribbean wholesalers and retailers buy from a combination of local and US wholesalers, depending on who offers better service and prices. More information on US food wholesalers servicing the Caribbean is provided in the summary guide to this series, which is entitled "The Caribbean: A Summary Export Guide to the Consumer Food Market".

Payment terms depend on the companies involved, but generally wholesalers buy from suppliers and sell to retailers on 30-day terms. Sales to smaller counter shops are usually on a cash basis, though some wholesalers extend credit.

Laws and Regulations Concerning Imported Food

As small countries with large proportions of the population involved in agriculture, the OECS member states can be quite restrictive when it comes to certain imported food items. Permits and licenses are required to import a great number of products. In some cases, the government marketing board is the sole importer of certain items, such as staple foods and vegetables. US labelling and packaging standards are well-accepted.

Price controls are in place for all the islands, though are more of an issue on Antigua and St. Lucia than elsewhere. In Antigua and St. Lucia, almost all imported food items are price-controlled, and government inspectors regularly examine invoices to determine if wholesalers and retailers are operating within their allowed mark-up. In Saint Lucia, for example, importers are allowed a 5.5 percent markup, wholesalers 7.5 percent, and retailers 10-15 percent. In order to survive, many distributors have their suppliers build a commission into the invoice.

On the other islands, price controls are generally in place for staple items such as flour, rice, sugar, and milk. Although other items may officially be price-controlled, enforcement is spotty.

Antigua and Barbuda

Imports of most consumer foods and beverages, except coffee, breakfast cereals, loose grains, and high proof spirits, require an import permit. Import licensing is handled by the Ministry of Trade, Industry, Commerce and Consumer Affairs. Meat products must be accompanied by certificates from the Ministry of Agriculture in the exporting country. In addition, local meat inspection is carried out by the Antiguan Ministry of Agriculture. The principal documents required by the Customs Department include: an import entry warrant, a commercial invoice, a bill of lading or airway bill, a certificate of origin, and an import license where necessary.

Dominica

Import permits are required for a number of products if they are being brought in from non-CARICOM or non-OECS sources. These products include eggs, potatoes, tomatoes, other vegetables, tropical and citrus fruits, coffee, edible oils, pasta, jams and jellies, fruit juices, pepper sauce, waters, and liquor.

Grenada

As a member of CARICOM and the OECS, Grenada places various types of restrictions on imports from extra-regional sources. Restricted products include: grapefruits, oranges, cantaloupe, sweet potatoes, tomatoes, carrots, cabbage, lettuce, cauliflower, raddish, beet, cucumber, okra, ground spices, curry powder, jellies and jams, pasta products, oils, margarine and shortening, malt beverages, porter, stout, ale, aerated beverages, beer. Import of these items has been restricted by the OECS, CARICOM, or the Ministry of Trade. A US exporter who wishes to export such products to Grenada must first contact a local import agent who will then take the necessary steps to obtain an import license and gain approval from the appropriate governing body.

Through national restrictions, chicken, eggs, and high proof spirits are prohibited from importation, and exemptions are only granted by the Director of Trade when local production cannot meet demand. Imports of milk, sugar, and rice are under full control by the government Marketing Board.

St. Kitts and Nevis

An import license is required from the Government Supply Office in the Ministry of Trade in order to import most consumer food and beverage items. The Supply Office also monitors trade and local production, and enforces import restrictions when necessary. Currently, there is no permanent negative list of products prohibited from import, except for macaroni and cheese.

St. Lucia

An import license is required to import many products from the United States (or any other non-OECS or CARICOM nation), including (but not limited to): meat, fish, crustaceans and molluscs, fresh milk, eggs, vegetables, many fresh or dried fruits, ground coffee, prepared meats, edible oils, margarine, pasta, aerated beverages, and beer. For imported bulk rice, bulk sugar, and baker's flour, the Ministry of Trade has a monopoly but places supplies on tender for local importers.

St. Vincent and the Grenadines

Imports to St. Vincent and the Grenadines of most food products and agricultural produce originating from non-OECS or CARICOM member states require a license from the Ministry of Trade, Industry, and Consumer Affairs. Importation of meat also requires approval from the Veterinary Division of the Ministry of Agriculture.

Tariffs and Other Taxes

As members of the Caribbean Common Market (CARICOM), tariffs on consumer food and beverage goods imported to OECS countries from extra-regional sources follow the Common External Tariff order (CET). According to this schedule, the maximum rate of 35 percent is to be reduced to 20 percent between January 1, 1998 and June 13, 1998. However, this reduction does not apply to most agricultural and agriculturally-based food products, which are the subject of a study by CARICOM. A report on this study and a new schedule of rates for these products are expected in 1998.

Under the CET schedule, many products are exempted from CARICOM-imposed tariff rates. Duties on such products may be determined by the member countries, and can vary greatly in some countries due to local market conditions. Those products that are exempted in OECS countries from CET tariff rates include:

	0201 - 04, 07			fresh and frozen meats
	0210.10			bacon
	0302 - 05			various fish
	0306					shrimps, prawns, lobster, other frozen crustaceans
	0401			milk and cream
	0402			powdered milk
	0701.9			fresh potatoes
	0703.10			onions
	0710.10			frozen potatoes
	0702			fresh tomatoes
	0703 - 10			various vegetables
	0713			peas
	0801 - 02			various nuts
	0804					fresh fruits: dates, figs, pineapples, guavas, mangosteens
	0806 - 09			fresh fruits: grapes, melons, apples, pears, apricots, peaches, berries
	0901			some coffee products
	1507-09/11/12/14/15			various vegetable oils
	1601			sausages
	1602			ham, bacon
	1604			various prepared fish
	1904			various cereal preparations
	2001 - 05			various prepared vegetables
	2007			jellies
	2009			various juices
	2103			various sauces
	2203			beer
	2204			wine
	2207-08			various spirits

A listing of frepresentative tariff rates for each island is included as Appendix 2.

Antigua

In addition to import duties, which follow the CET schedule, imports of all consumer foods and beverages are subject to a 5 percent customs service tax. There is also a consumption tax of 15 percent charged on some imports, such as yogurt, canned fruits and vegetables, prepared meats, waters, juices, and many other miscellaneous foodstuffs. Imports of beer receive a consumption tax rate of 50 percent, while many for many spirits the tax is only 5 percent to 20 percent.

Dominica

In addition to the import duty, there is a General Consumption Tax (GST) of 25 percent on most imported goods, as well as a 1 percent service fee. Beef can be imported duty-free, while poultry is 20 percent. Fish attracts a rate of 40 percent, while fresh milk is duty free. Fresh fruits and vegetables attract a 40 percent rate of duty, and most processed food products are assessed 30 percent-40 percent duty rates.

Grenada

In addition to the import tax, three other taxes are applied to imports of food and beverage products to Grenada. A General Consumption Tax (GST) of 25 percent is added to the c.i.f. value of all goods. The Environmental Levy Tax is applied to products packaged in plastic containers (i.e. many beverages), EC$0.25 per container. There also is a customs service charge of 5 percent over c.i.f. value on all imported goods. There are a few products on which no import tax is levied, including: milk and cream, powdered milk, fresh potatoes, onions, and corn.

St. Kitts and Nevis

In addition to import duties, imports to St. Kitts are subject to a consumption tax of about 10-15 percent on most items, a 3 percent customs service charge on all products, and a bottle levy of EC$0.30 on most beverages, and beers. Import duties in St. Kitts tend to be low on many products, such as most meats (0-5 percent), potatoes, onions, and various other selected produce (5 percent). Some duty-free items include: poultry backs, necks and wings; cod; mackerel; herring; and garlic.

St. Lucia

Imports of food and beverage products arriving to St. Lucia are subject to three separate tariffs. Import duties adhere to the CET, except for those products for which St. Lucia has been granted exemption. An additional consumption tax is levied on all imports, calculated on a percentage of the c.i.f. value plus the import duty. Finally, a service charge of 4 percent on c.i.f. value is applied to all imports.

Many meat and fish imports are duty-free, as are imports of milk and cream, garlic, some dried vegetables, many provisionally preserved vegetables, peanuts and baby foods. Consumption tax on most imported consumer foods and beverages is 5 percent, although rates can get as high as 45 percent.

St. Vincent and the Grenadines

Three types of tariff are applied to most food and beverage imports: import tax, consumption tax, and a customs service charge of 2.5 percent (of c.i.f. value) on all items. Import tax rates on most food and beverage products are in accordance with the CET, although certain exempted items are subject to lower duty rates due to local market conditions. Duties on most meat imports are only 5 percent, and imports of milk, powdered milk, and some chicken parts are duty-free. The consumption tax on imported food and beverage items can vary between 5-40 percent, although most items fall in the 10-30 percent range. Some examples include: fish (30 percent), peas and beans (30 percent), vegetables (20-30 percent), cheese (20 percent), milk (5 percent), and powdered milk (2.5 percent).

Contacts for Regulatory Information

Consumer Food Imports

 

2. This figure was estimated as official trade data from the OECS countries is old and unreliable. The estimate was based on official export data from the US, EU, and Canada, with an estimated 40 percent share held by other regional and overseas suppliers. However, even export data from these three main suppliers is believed to be underestimated and suspect. The actual consumer food import market size, therefore, may be significantly larger than even this $160 million estimate.

Consumer foods are defined for the purposes of this market study as the following two-digit Harmonized System categories: 02 (Meat, Fresh, Frozen and Dried), 03 (Fish And Seafood, Fresh, Frozen and Dried), 04 (Dairy and Eggs), 07 (Vegetables, Fresh, Frozen and Dried), 08 (Fruit And Nuts), 09 (Coffee, Tea, Mate And Spices), 16 (Preparations Of Meat and Fish), 17 (Sugars And Sugar Confectionary), 18 (Cocoa And Cocoa Preparations), 19 (Preparations Of Cereals), 20 (Preparations Of Vegetables and Fruits), 21 (Miscellaneous Edible Preparations), 22 (Beverages, Spirits And Vinegar).

 

The OECS consumer food and beverage import market is estimated to total about US$160 million⁽²⁾. The United States is the largest single supplier to this market with an import market share of 30 percent, followed by the European Union with 27 percent (see Figure 1). Other suppliers include regional Caribbean countries (primarily other OECS members, Trinidad, Jamaica, and Barbados), New Zealand (mostly meat and dairy), and Canada. (see Figure 1). In 1995, the two largest regional suppliers (Barbados and Trinidad) exported nearly $25 million of consumer foods and beverages to the OECS (see Tables 9 and 10). Informal trade of fresh fruits and vegetables between islands is common in the OECS and not generally reported in official trade statistics. OECS food processing is limited, although regional processed food products are sourced from other CARICOM countries, most notably Trinidad and Jamaica.

Meat (mostly chicken), dairy (milk, cheese, and butter), and beverage (mostly wine and spirits) products account for nearly seventy percent of all imports from the top three developed country suppliers (see Figure 2 and Table 1). The US dominates the import market for fresh and frozen meat, while the EU supplies most of the dairy products and over 60 percent of imported beverages. While not shown here, New Zealand also supplies sizeable quantities of meat and dairy items. Imports of processed fruit/vegetable products and cereal preparations are also higher than shown in Figure 2, as more developed CARICOM suppliers (Trinidad, Barbados and Jamaica) export these products in volume to OECS. These products include packaged cereals, cereal snacks, other bakery items, sauces, condiments, packaged juices, and canned fruits and vegetables.

Import markets are larger for those countries with sizeable tourist industries such as St. Lucia and Antigua (see Figure 3). These two countries account for more than half of all consumer food imports. In addition to the high number of tourist arrivals in both Antigua and St. Lucia, local resident populations are more affluent, which also accounts for higher imports. St Kitts' imports are low, due not only to the small number of sizeable hotels, but because of the small relative population of the country. US market share is strongest in Antigua, where the US supplies over 60 percent of total imports from the three suppliers studied. In no other OECS market does US import share exceed 50 percent and in only one market (St. Kitts-Nevis) does the US supply more than EU exporters.

Individual OECS country food imports are discussed in further detail below. Summary tables of imports from the United States, the European Union, and Canada are given in Tables 2 through 7 for each OECS member country. Table 8 provides a list of the best market prospects for US suppliers of consumer food items to the OECS.

Antigua and Barbuda. Consumer food imports from the three studied suppliers totaled $24 million in 1996, although regional and other suppliers increase the size of this market to over $40 million. Despite its relatively small population compared to most other OECS countries, Antigua has a developed tourism industry which accounts for the high level of imports.

The US dominates the market for fresh and frozen chicken, the largest single item imported with an estimated market demand of over $8 million per year. Milk, butter, and cheese also account for a sizeable portion of imports, although the US only supplies a fraction of this market dominated by the EU and New Zealand.

Fresh fruit and vegetable imports are rising and the United States has a sizeable share of temperate items. Other Caribbean suppliers (most notably Dominica) also ship fresh fruits and vegetables to Antigua, which has only limited domestic production. US exporters of these products should see further growth as hotels continue to seek reliable suppliers of top quality produce and the island's sizeable middle class become more accustomed to buying them at upscale supermarkets such as Epicurean.

Demand for imported processed fruits, vegetables, and cereals is also relatively strong in Antigua. While regional suppliers from Trinidad and Jamaica have a strong market position, the United States does well in items such as breakfast cereals, bake mixes, biscuits and other baked items, condiments, canned soups, and canned vegetables.

Imports of juices, other non-alcoholic beverages, wine, beer, and spirits are also high. The US supplies about $2 million of these items, mostly juices and other non-alcoholic beverages. Packaged juices and soft drinks are also sourced regionally. Beer is imported mostly from other Caribbean breweries, who produce not only domestic brand beer (Red Stripe from Jamaica, ECU from St. Vincent, etc.), but also European brands such as Heineken and Guinness. Europe supplies over 80 percent of wine imports and it supplies more than 90 percent of imports of spirits (other than rum which is sourced regionally).

Dominica. The small size of Dominica's tourism industry and its relatively poorer population limits the import market for US consumer food items. Imports from the US, Canada, and the EU were just over $10 million in 1996 and the total import market is estimated to be under $20 million when including other suppliers. Lack of an international airport and tourist-class beaches further limit Dominica's tourism and, therefore, food import potential.

Frozen chicken is the largest single consumer food item imported and the US supplies most of the demand. Milk and cheese products are supplied primarily by non-US suppliers. Most processed fruit and vegetable products are supplied by regional suppliers, although small volumes of US product are available on supermarket shelves. There is very little opportunity for fresh fruit and vegetable suppliers as Dominica produces most of its own needs and exports surplus to neighboring islands. Wine imports are low, although the US supplies the majority of this $200 thousand annual market. The EU supplies most other non-regional beverage imports, primarily spirits. Beer is produced locally and is also imported from other Caribbean islands.

Grenada. Grenada's consumer food import market is estimated at $20 million annually, with over $12 million supplied by the US, EU, and Canada. Meat (mostly frozen chicken) from the US and milk, sugar, and alcoholic beverages (mostly wine and spirits) from the EU account for roughly half of imports. Most fresh vegetable imports are potatoes from the EU, while processed fruit and vegetable imports are minimal from both the US and EU. As with other OECS members, Grenada imports most processed fruit, vegetable, and cereal items from regional suppliers.

St. Kitts-Nevis. With the smallest population of any independent country in the Western Hemisphere and a relatively small tourism industry, St. Kitts-Nevis total imports of consumer food items are estimated to be under $15 million annually. The US exported $4 million of these items to St. Kitts in 1996, with over half comprised of frozen chicken. Prepared cereals, canned vegetables, juices, and wine account for the majority of other US food supplies. Fresh produce imports are low with most demand met with local production. EU suppliers dominate the market for milk and cheese products.

St. Lucia. As with Antigua, St. Lucia has a sizeable hotel sector. Along with a relatively large population (by OECS standards) and sizeable middle class, this makes St. Lucia the largest consumer food import market within the OECS. In 1996, imports from the US, EU, and Canada totaled $29 million, although regional and other suppliers easily push the total import market to over $50 million annually. Chicken, milk, cheese, sugar, and beverages are the most demanded import items. The US supplies sizeable quantities of frozen chicken, fruit juices, and wine. The EU dominates the supply of milk, cheese, sugar, and spirits (except rum).

Despite domestic production, St. Lucia imports sizeable quantities of fresh vegetables from the United States and Europe. While these consist primarily of potatoes, onions, and garlic from Europe, other fresh vegetables from the US are also procured for both the tourist and supermarket sectors. The US supplies over $200 thousand annually in other types of fresh vegetables.

St. Vincent and the Grenadines. Consumer food imports are estimated to total less than $20 million annually, with fresh and frozen meats (mostly chicken), milk, cheese, and sugar accounting for at least half of imports. The US supplies most of the import demand for chicken, with an import market estimated at nearly $5 million. The EU has a sizeable share of the import market for milk, cheese, and sugar. Processed fruits, vegetables, and cereals are supplied mostly by Trinidad and other regional countries, although the US does export about $250 thousand of these products to St. Vincent. A domestic brewery supplies most of the beer market with both local and European brands. Imports of wine and spirits (except rum) total about $600 thousand per year, mostly from the EU.

Table 2 Antigua Import Market in Brief for Selected Suppliers (1996, US$ 000s)
	Value US$ 000s	Import Share (Select Suppliers)
		US	EU	Canada
Total Consumer Food Imports (US$ mil)	24,465	63%	33%	4%
02 Meat, Fresh, Frozen and Dried	9,135	97%	1%	2%
0207 Poultry (fresh or frozen)	8,243	100%	0%	0%
03 Fish And Seafood, Fresh, Frozen and Dried	561	40%	38%	22%
0305 Fish (dried, salted, or in brine)	348	4%	61%	35%
0306 Crabs, Lobsters, Shrimp (fresh and frozen)	162	100%	0%	0%
04 Dairy and Eggs	2,261	0%	100%	0%
0401 Milk & Cream (not sweetened or condensed)	241	0%	100%	0%
0402 Sweetened and/or Condensed Milk & Cream	1,385	0%	100%	0%
0405 Butter	158	4%	96%	0%
0406 Cheese	469	0%	100%	0%
07 Vegetables, Fresh, Frozen and Dried	708	90%	7%	4%
0702 Tomatoes (fresh)	72	96%	4%	0%
0703 Garlic, Onions, Shallots (fresh)	27	96%	4%	0%
0709 Asparagus, Celery, Peppers, Mushrooms, etc. (fresh)	471	100%	0%	0%
0713 Dried Beans and Peas	42	100%	0%	0%
08 Fruit And Nuts	156	79%	17%	4%
0810 Berries (fresh)	46	100%	0%	0%
0813 Dried Fruits/Nuts	56	94%	0%	6%
09 Coffee, Tea, Mate And Spices	185	11%	89%	0%
0902 Tea	159	0%	100%	0%
16 Preparations Of Meat and Fish	658	49%	44%	7%
1601 Sausages	216	34%	60%	6%
1602 Other Processed Meat Products (not frozen)	298	41%	53%	5%
1604 Processed Fish (not frozen)	81	79%	0%	21%
1605 Processed Crabs, Lobsters, Shrimp (not frozen)	63	100%	0%	0%
17 Sugars And Sugar Confectionary	1,123	7%	93%	0%
1701 Cane or Beet Sugar	950	2%	98%	0%
1704 Sugar Confectionary (w/o cocoa)	172	31%	69%	0%
18 Cocoa And Cocoa Preparations	300	19%	81%	0%
1806 Chocolate & Other Food Preparations w/ Cocoa	300	19%	81%	0%
19 Preparations Of Cereals	1,721	65%	34%	1%
1901 Baking Mixes, Other Flour Preparations, Infant Food	476	68%	32%	0%
1902 Pastas	220	27%	72%	1%
1904 Prepared Cereals (e.g. breakfast cereals)	513	87%	13%	0%
1905 Biscuits, Wafers, and Similar Baked Products	513	57%	40%	3%
20 Preparations Of Vegetables and Fruits	1,403	75%	11%	15%
2002 Canned Processed Tomatoes	132	74%	26%	0%
2005 Canned Vegetables & Mixed Vegetables	245	67%	33%	0%
2008 Canned Fruits	81	85%	5%	10%
2009 Fruit and Vegetable Juices	888	80%	2%	18%
21 Miscellaneous Edible Preparations	1,868	72%	16%	12%
2103 Condiments (Mustard, Soya Sauce, Ketchup, Other Sauces)	424	42%	21%	37%
2106 Misc Food Preparations (not elsewhere specified)	1,324	81%	15%	5%
22 Beverages, Spirits And Vinegar	4,387	37%	62%	1%
2201 Bottled Water	133	14%	76%	10%
2202 Soft Drinks & Other Non-Alcoholic Beverages (ex. juices)	1,721	62%	36%	2%
2203 Beer	219	93%	7%	0%