duties on beer, wines and spirits.

Finance Minister the Hon. David Saul said there should be little inflationary impact because of the increased duty.

But that was not the opinion of hotel management and liquor retailers. Bermuda Hotel Association President Mr. Stephen Barker said there would definitely be an impact.

Dr. Saul said it had been two years since the previous increase in specific duties on wine, alcohol and tobacco, before announcing the 1994-5 rises.

Duty on wines increases 25 cents to $2.50 a litre (11 percent); cooler drinks increase from $1.10 per litre to $1.22 (11 percent); beer and cider is up eight cents to 86 cents per litre (10.3 percent); spirits rise from $21 per litre to $23 (9.5 percent); and cigarettes increase by $7 to $62 per kilogram (12.7 percent).

The Minister said: "It is estimated that these measures will raise $1.7 million in a full year.

"While the increases themselves are all above the rate of inflation they need to be put into perspective. The increases add no more than 18.5 cents on a .75 litre bottle of wine; 80 cents on a 40 proof bottle of spirits; 2.4 cents on a .330 litre can or bottle of beer; and 15 cents on a packet of 20 cigarettes.

"Accordingly, there is no reason for the wholesale or retail prices of alcohol and tobacco products to be increased by any more than the actual impact of the change in duty and perhaps the normal seller's margin on that change, on the unit of sale, i.e. the bottle of beer, the bottle of wine and the pack of cigarettes.

"These duty increases should have little inflationary impact.'' But BHA President and Regional Vice President of Princess hotels, Mr. Barker said: "It will definitely have an impact on our costs.

"We are obviously disappointed that duties would be increased at this time when hotels are having a particularly difficult time from a financial point of view. We are still mired in the recession.

"We just recently met the Government and, in fact, had some meaningful discussions on how the profitability of the hotels could be improved in the future. There was no discussion on increases.

"The position in most of the hotels is that all our prices have to be reduced not increased.

"We are losing our competitive position with the rest of the world. People are objecting to the high prices and we have to find a way to reduce costs.'' Vice President of the Sonesta Beach Hotel, Mr. Dennis Tucker said: "We have not had a chance to look at this yet, but it will certainly have an impact.

"Any increases in our basic costs will affect prices in the hotel, especially as we try to climb out of the recession.'' Mr. Malcolm Gosling, of Gosling Bros., said he had not yet assessed the impact on the beers, wines and spirits his company imported.

He said that products already in the shops would not be affected but anything "taken out of bond'' would be subject to an increase in duty.

MAKING A POINT -- Finance Minister the Hon. David Saul explains his Budget to journalists during yesterday's press conference at the Cabinet building.