Smuggled flour of poor quality, causing revenue losses -Namilco
December 5, 2003
The National Milling Company of Guyana Inc. (Namilco) yesterday highlighted the problem of flour being smuggled into the country across its borders, citing a significant loss of revenue to itself as well as the Guyana Revenue Authority (GRA) in addition to the low quality of the product.
Namilco estimates that as a result of this smuggling it loses over 1,000 45-kg bags of flour in sales per week which translates into over $21 million in lost Consumption Tax revenue per annum to the GRA, a release from the company stated. Namilco noted it pays over to GRA 10% Consumption Tax on sales.
According to the release, smugglers transfer flour from the original bags into the local Thunderbolt bags which they purchase from bakeries. Moreover, these recycled bags are often not washed and may be infested so Namilco's genuine products could become tainted.
The company is urging bakers not to sell their used bags to individuals unless they are aware of its intended use.
"Tests carried out by the mill show the smuggled flour to be of low quality, low protein and high (in) moisture and this would account for the cheaper price.
Bakers who unsuspectingly bought this flour through middlemen, looking to make a fast dollar, found that their bread did not raise," the local flour company said.
Namilco disclosed that it has already put certain measures in place to assist customers in recognising its products from the fake ones. The Thunderbolt 45-kg bags are now stitched at the top with a coloured and white thread in a double loop, and this is easily distinguishable as the threads are interwoven. The smugglers, the release noted, use a single loop and have already started using coloured thread alone. Further, Namilco would change the colours of the two threads periodically.
The company also puts a "best before" date on its bags which is three months from the date of production - e.g. flour produced on December 5, 2003 would be dated March 5, 2004. Customers buying large bags of flour are asked to check whether this date has expired and if it has, they should refuse to take the product.
Flour has a fast turnover and it is unusual for large bags to expire, the company advised.
It is also calling on customers buying small quantities to resist purchasing flour in unmarked plastic or paper bags since smuggled flour could be repackaged in such bags.
And seeking the intervention of the authorities, the milling company said it is appealing to the Food and Drug Department and the Guyana National Bureau of Standards to insist that supermarkets and shopkeepers not repackage flour for sale since Namilco has invested substantial sums of money to produce adequate quantities of packaged products in various sizes.
Apart from consumers being duped into thinking they are getting a bargain in buying in pounds rather than kilogrammes, Namilco noted, it is unsafe and sometimes dangerous to purchase repackaged goods.
Namilco declared that it is standing by the high quality of its products and would not allow unscrupulous individuals to tarnish its reputation, adding that it has a return policy on all its products.
"We urge the relevant authorities to assist in stamping out any form of smuggling ...," Namilco asserted.
Citing particular cases of flour smuggling, the release said that the Customs Department recently carried out an exercise on the Corentyne and in the New Amsterdam area and seized a quantity of 45-kg bags of flour. According to Namilco, some of the seized flour which was not transferred to Thunderbolt bags carried the brand name "Maya Tarweblom". The bag had no country of origin or the manufacturer's name. Most of the flour reportedly comes via the Corentyne River, the release said.
A few months ago, the release said, Customs officials caught an individual on the East Coast Demerara actually transferring the smuggled flour into the Thunderbolt bags.
When caught persons are often asked to pay a fine and their flour is seized but it seems as if this is not sufficient to deter them from continuing their trade, Namilco posited.