Retailers call for couriers to pay more duty
Retailers have hit out against courier companies trying to pass themselves off as retailers and called for them to pay a higher rate of customs duty on goods.
Paula Clarke, chairman of the Bermuda Chamber of Commerce’s retail division, said that the couriers were the biggest single threat to the livelihood of brick and mortar retailers and the loss of a physical retail presence on the Island would result in drop off in new international business and the tourism.
She said that when using a courier to bring in goods, apart from the fee paid to the courier and the rates paid on the merchandise which go to Government, all of the money spent on the items themselves was leaving the Island’s economy.
But couriers have hit back saying that people should have the choice to buy what they want and it is within their rights to market their business as they wish.
They also said that the wider issue affecting every industry in Bermuda was the number of people who have been leaving the Island and resulting loss in revenue for stores.
Kristi Grayston, owner of Pulp & Circumstance, said that some couriers had been using the ‘Buy Bermuda’ terminology to promote their company by saying that purchases made through them would help to support the Bermudians they employed.
But the reality she said was that they were encouraging people to shop online and bring in goods that were already available in Bermuda.
“It is one thing for a courier company to say you should support them but it is something completely different when they say support them by attacking another industry on the Island,” she said.
“At the end of the day we support their industry and we all use them to import special items for our customers which you can’t find in Bermuda, but I think that they should have to pay a higher rate of duty, particularly on the items that you can get here.
“I think it is always a bad idea to promote your business at the detriment of another business. Retailers are really struggling at the moment and frankly couriers are not.
“What they are doing is not supporting Bermuda and retail here at a time when retail needs support the most.”
Ms Grayston, who was the former chairman of the Chamber’s retail division, said that retailers had been lobbying Government for some time over special rates on imports and following the recent hike in duty paid at the airport to 35 percent, which comes into effect tomorrow, urged for it to be dropped to 25 percent and for courier companies to pay 25 percent in duty as well.
Ms Clarke said that her main issue was with couriers representing themselves as retailers when bringing in clothing and other items and called on Government to review the amount that they were currently paying on bringing in goods.
“When customers buy goods from them the money is going straight out of Bermuda,” she said.
“Apart from the rate that they pay the couriers and the and the duty which goes to Government the rest of the money leaves the economy.
“One way to increase revenue for the Government would be to raise the duty on goods that are brought in by couriers.
“There is a slow simmering of discontent among retailers about couriers trying to pass themselves off as retailers they are a service provider and they don’t provide the same level of infrastructure support that the retailers do.”
Ms Clarke said her business had been impacted across all lines of clothing and shoes and that the actual figure for residents spending online during 2010 was higher than the Department of Consumer Affairs’ estimate of approximately $29 million.
“My opinion is that courier companies are a bigger threat long-term to brick and mortar stores than anything else and if we lose the physical presence of a healthy retail environment in Bermuda we will not be able to attract new international business or have a sustainable retail environment for tourists,” she said.
Sharon Bartrum, owner of 27th Century Boutique, said that it wasn’t a level playing field with couriers not having the same overheads as the retailers.
However Steve Thomson, owner of Mailboxes Unlimited, said that he and his family shopped in Bermuda wherever they possibly could, but there were some items that weren’t available on the Island as well as special deals in sales in the UK, US and Canada which he felt people should have the option of buying.
He said that while the empathised with the plight of retailers just like other importers there were a number of similarities with couriers who also paid payroll tax, rent and duty on goods they bring in. Also they employ Bermudians, and as an industry, along with shipping and air freight companies, had close to 1,000 staff.
“At the end of the day I am going to market hard and I’m going to give the best deal to my clients and I’m going to make sure that I keep my prices as low as humanly possible so that everybody has a choice,” he said.
Mr Thomson, who also owns a dry cleaning business and employs 35 Bermudians, said that trade was down across the board and he was having to lay off staff and close stores. Almost every business on the Island was suffering from the thousands of people who had left the Island over the past couple of years.
“Everybody seems to be lashing out and looking for somebody to blame,” he said. “But we should all work together and provide a choice for people.”
He said that raising the rate of duty for couriers and effectively forcing people to buy a particular item at one specific store may cause a backlash with residents ultimately deciding not to shop on-Island at all.
Rick Craft, CEO of International Bonded Couriers, denied that his company was a retailer, but added that it did provide some retail courier services.
“As far as a bond shipping business it is an option for people and you simply can’t get everything here in Bermuda with its small economy,” he said.
“Our services represent and alternative for the Bermudian public to purchase what they need that may not be available here in Bermuda.”
Chris Heslop, FedEx senior manager for the Caribbean region, made no comment.
The Chamber will be holding its second evening shopping event tonight and Friday night with all stores in Hamilton, including the back of town, open until 8pm.
The focus will be on value for money with the theme ‘fully stocked and ready to serve you’ and all shops offering special deals and restaurants will also be taking part.
Entertainment, music and tasting events will take place throughout the two nights of festivities.
The Chamber is also launching a new advertising campaign centred on shopping local at LF Wade International Airport in the coming weeks.
For more information contact www.bermudacommerce.com