GraceKennedy cries foul

Published: Sunday | December 22, 2013 Comments 0

Unauthorised exports cost company

Tameka Gordon, Business Reporter

Conglomerate GraceKennedy Limited said the unauthorised exports of some of its products in commercial quantities into overseas markets in which it has a major presence have resulted in additional operational cost, delays to its shipments, as well as additional logistics costs.

It said the unauthorised exports include its own brands as well as non-Grace brands distributed exclusively by GraceKennedy.

The company has identified "mainly informal exporters" as responsible for sending commercial quantities of its products overseas, consolidated with other commercial shipments, group Chief Executive Officer of GraceKenendy Don Wehby told the Sunday Business.

In July of this year, the company was hit with the theft of packaging and seasonings for its Cock Soup mix, which saw counterfeit versions of the product being sold on the local market.

However, Wehby said the issue of the unauthorised exports, which have been identified for some time now by the company, in the main related to genuine Grace products.

He said the company recognised that the elimination of unauthorised exports will greatly reduce the issue of counterfeiting.

The "parallel exports have been observed in our major markets in the Caribbean, North America and Europe," the GraceKennedy CEO said.

"We recognise that persons get more and more requests from their family members for Grace and other brands from home. However, we must make the products available to them in a way that satisfies all requirements," said Wehby.

Asked what was the level of the financial fallout to the company, he said the financial fallout was not the major issue for the conglomerate.

"Rather, it is the threat to the equity and image we have built in the brand over the past 91 years, and the fact that we must comply with the legal requirements in the territories in which we seek to make our products available to our consumers," he said.

With specific labelling requirements for many of the markets in which the group operates, Wehby said inspection costs were charged to GraceKennedy, as the brand owner, when non-compliant products entered those markets.

He said the labelling for the local market is different from those for the overseas market. "This is very detailed and varies by market - font size, position of label, units of measure vary by market," said the Grace CEO, in emailed responses to Sunday Business queries.

Wehby said that if they do not meet the specifications agreed to, the products are placed on a watch list that requires 100 per cent inspection, which results in delays in clearing shipments as well as added inspection costs.

"The main issue is that these charges add to our cost of operating because we miss sales when shipments are delayed and we pay added logistics costs," Wehby said.

"We deem commercial quantities to be shipments of goods that could not be reasonably consumed by one family in three to six months," he said, noting that the affected brands were Roma Cocoa, Tastee Cheese, Lishus, Capri Sun, and Caribbean Choice.

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