Production shortages including alcohol hit hotels; scramble on for solutions

THE Jamaica Hotel and Tourist Association (JHTA) along with manufacturers and distributors of spirits are set to meet on Friday (September 2, 2022) to discuss solutions to a shortage of alcoholic beverages that has become "a problem" for hoteliers.

"It started in June when increased occupancies were being seen in the hotel sector, but became a problem really more from the end of July into August when most hotels were showing strong occupancy levels," Clifton Reader, president of the JHTA, told the Jamaica Observer.

While the shortage of spirits is causing alarm because of its high consumption rate in hotels, Reader said it is not the only item that purchasing managers and hotel owners are seeing in short supply.

The Business Observer saw a listing of items which hoteliers say are in short supply. They include cleaning chemicals, paper including printing paper and napkins, rum, sodas, bottled water, some flavoured beers, lettuce, and bass fillet — both premium and basic.

"I was not aware that the situation was that serious until they met with me last week," John Mahfood, president of the JMEA, told the Business Observer.

The JHTA met with the Jamaica Manufacturers and Exporters Association (JMEA) about the issue last Thursday. Mahfood was quick to point out that efforts are underway to solve the matter in the shortest possible time.

"It's not peculiar to the hotel sector because if you had tried to buy rum or Red Stripe over the independence period, they would be in short supply."

Mahfood said the hoteliers main concern was to get the shortages sorted out before the start of the winter tourist season in December.

"They say they can't wait until then to point out the issue, they have to let it be known now what the issues are and find out when they will be solved," Mahfood added.

The JMEA boss continued: "The problem appears to be serious. It appears that all the hotels are having that scare because of the products that are involved and obviously, the last thing we want them to do is to import these items," he said as he added that The Linkages Council's work to bring manufacturers and hoteliers together must not be undone by the current problems.

Luckily, it seems the hoteliers understand the reason behind the shortages.

"We have a supply chain issue internationally and, of course, it will affect the local producers," Reader told the Business Observer.

The issue mainly impacts packaging material for various items, especially rum and sodas.

"There is a combination of things in terms of supplies both of CO2 [carbon dioxide] and other materials. There is generally increased demand across all markets. I think other companies are having challenges in supplies as well, so that also compounds the issue," William Mahfood, chairman of the Wisynco Group, said in an interview with the Business Observer about the matter. Wisynco is the country's largest supplier of sodas to the hotel sector. Pepsi-Cola Jamaica, the other big beverage producer in the island said it is not having any issues with supplying the hotels. Pepsi-Cola Jamaica's marketing coordinator, Yanique Dawkins, estimates her company has about 10 per cent of the hotel market for sodas.

The Wisynco chairman said his company has been impacted by shortage of packaging, sugar and carbon dioxide which goes into the production of sodas.

"We, for the first time, actually brought in a shipment of sugar in order to ensure that we wouldn't run out," he added as he noted that the sugar shortage also impacted other manufacturers including those in the baking sector.

Mahfood said the company is putting in measures to cauterise the situation. "Up to Monday last, we had discussions with our carbon dioxide provider [Industrial Gases Limited (IGL)] and we have been doing a lot to work with them while seeking alternative sources as back up [for carbon dioxide supplies], because we can't afford to run out of products," he adds as he pointed out the risk of having a single source of a crucial raw material for his company.

But he said improvements should be seen within "the next month or so" in terms of supplies as the company boost its inventory to account for any delays that may be due to challenges which are still affecting the movements of goods across the world.

The company's audited financials for the year end June 30, 2022, show inventory levels jumped 51 per cent from the prior year to $5.4 billion. Other manufacturers, citing supply chain issues have boosted inventory. At Wisynco, the increased inventory is also to ensure enough packaging material is available to meet production demand.

On the rum side, Clement "Jimmy" Lawrence, the chairman of the Spirits Pool Association, also pointed to the supply chain issues as the main problem affecting his members ability to supply the country and hotels with spirits.

"The industry is working really hard at [a solution] and come the end of September we should revert to a normal situation," Lawrence said. He added that there are opportunities within the industry for alternatives from the six distilleries within the island. He pointed out that it is in the producers best interest to solve the issues quickly because of the impact it will have on their bottomline. Apart from the meeting planned for this Friday with the hoteliers, Lawrence said the Spirits Pool Association, especially the rum manufacturers, will meet in the next two weeks to review the progress on some of the plans that were made to alleviate the situation.

The hoteliers and manufacturers also indicated that ackee supply to the hotels is also short due mainly to a shortage of cans. Producers of canned ackee have since been discussing efforts to blast freeze the product as an alternative way of getting the products to the market while issues with getting cans sort themselves out.

As for spirits, Reader said while packaging material is being sought to resume regular supplies, "If they have the physical product which is the rum and they can't source the bottle, maybe we can come up with other packaging solution to get rum into our properties."

Wisynco Group chairman William Mahfood .
Jamaica Hotel and Tourist Association President Clifton Reader
Chairman of the Spirits Pool Association Clement "Jimmy" Lawrence
Jamaica Manufacturers and Exporters Association President John Mahfood .
Dashan Hendricks

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