Voluntary Report - public distribution

**Date:** 8/16/2004

**GAIN Report Number:** C14015

C14015

**Caribbean Basin**

**Retail Food Sector**

**British Virgin Islands**

**2004**

**Approved by:**

![](media/image1.wmf)Paul Hoffman, Director

Caribbean Basin ATO

**Prepared by:**

Nicole Smith, Agricultural Marketing Assistant

**Report Highlights:**

The U.S. has 84 percent market share of the \$16 million in food and
beverage market in the British Virgin Islands. Due to this high
percentage, the BVI consumer has the benefit of easily accessible high
value and high quality products. A long historic relationship, as well
as proximity to the U.S. Virgin islands and Puerto Rico, has made U.S.
food products preferred and most commonly visible on supermarket shelves
in the BVI.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Miami \[C11\]

\[C1\]

## Section I. Market Summary

### Country Snapshot

The British Virgin Islands (BVI), part of the Leeward Island chain, are
located in the Caribbean Sea about 50 miles east of Puerto Rico. Known
as "Nature's Little Secret," 16 inhabited and more than 20 uninhabited
islands consist largely of rolling green hills and white sandy beaches
and have a total area of 59 square miles. The total population is around
21,730 (2003 est.). The capital of BVI, Road Town, is located on the
island of Tortola, which lies just 8 miles east of St. Thomas in the
U.S. Virgin Islands. Tortola is the largest island at 21 square miles,
and serves as the center for commerce and government. Apart from
Tortola, the main inhabited islands of the BVI are Virgin Gorda at 8
square miles, Anegada at 15 square miles and Jost Van Dyke with 3.4
square miles. BVI also consists of a number of privately owned islands,
several of which serve as vacation resorts.

Each of the islands can be easily accessed from one another, and from
the U.S. Virgin Islands, by inter-island flights, small boats, and
regular ferry service. The islands have several ports, including Port
Purcell and West End in Tortola, St. Thomas Bay in Virgin Gorda and
Great Harbor in Jost Van Dyke. No direct flights are available to the
islands from the mainland United States, Europe, or South America, yet
inter-island flights are accessible from the three airports located on
the islands. The largest airport, the Terrence B. Lettsome Airport, is
located on Beef Island, situated on the east end of Tortola. At this
airport, several airlines offer flights to San Juan, Puerto Rico, St.
Thomas, U.S. Virgin Islands, and a number of other Caribbean
destinations. Two smaller airports, located on Virgin Gorda and Anegada,
offer flights to the Beef Island airport as well as charter flights to
other points throughout the Caribbean.

The BVI has long been a British Dependent Territory, and remains so
today. The United Kingdom governs over a significant portion of the
islands, including the territory's external affairs, defense, internal
security, and the administration of the courts. A governor, appointed by
the British crown, controls these areas of responsibility. The territory
does have some autonomy, as it is responsible for its own internal
self-government and is governed by a democratically elected Parliament
and Cabinet. BVI is an associate member of both the Organization of
Eastern Caribbean States (OECS) and the Caribbean Community and Common
Market (CARICOM). Membership in these organizations ease trade between
member Caribbean nations by offering duty-free access, facilitating
bilateral and multilateral co-operation, and allowing goods, services,
people and capital to move throughout the Caribbean nation members
without tariffs and restrictions.

The BVI economy is largely based on tourism, which generated
approximately 45% of national income for the country in 2003. Due to
close ties to the U.S. economy, tourism on the islands suffered in 2002
because of the U.S. economic slump after the events of 9/11, yet has
increased since then. Apart from tourism, livestock raising is the most
important agricultural industry on the islands. Poor soils limit the
islands' ability to produce its own food, which results in most foods
being imported. Yet despite the islands' poor soils, the BVI do produce
and export some agricultural goods, including rum, fresh fish, and some
fruits. Less than two percent of the economy is based on agriculture,
and the rest is comprised of the service sector, mainly the offshore
banking industry.

Despite its political ties to the United Kingdom, the BVI has been
closely related to the U.S. economy for many years. Proximity has also
resulted in the creation of very close economic and cultural ties to
both Puerto Rico and the U.S. Virgin Islands. The U.S. dollar serves as
the currency in BVI.

### Market Overview

The BVI retail market is composed of approximately twenty supermarkets
and grocery stores, as well as several smaller mom & pop stores. Most of
the major supermarkets and grocery stores are located in Tortola, with a
few located in Virgin Gorda. Both the supermarkets and grocery stores
import some of their food products direct from U.S. suppliers. The three
major food importers-distributors on the island own the main grocery
stores and supply others, so many of the retail stores receive products
directly from these importer-distributors, who in turn import most
products from the United States. Road Town Wholesale, the largest
wholesaler in the BVI, has four grocery stores, known as Rite-way. The
other main importers also have several retail stores: K-Marks has three
grocery stores, and Bobby's has two. Roughly 45 mom & pop shops, called
"suprettes" in the BVI, are currently in business, and can be found
throughout the islands. Local wholesalers and larger retail stores
supply the food needs of these smaller retail stores. Yacht provisioning
is also a big business in the BVI, and these wholesalers and retailers
supply this industry as well.

The U.S. Virgin Islands are playing an increasingly important role in
the food and beverage distribution in the BVI. Proximity has created
cultural and economic ties between the U.S. Virgin Islands and the BVI.
Retailers, especially smaller stores such as suprettes, as well as
individual consumers, purchase products from the U.S.V.I. Products
bought in the U.S.V.I. are quality U.S. products, and are available
cheaper than products imported into the BVI. Puerto Rico also provides a
market for BVI shoppers and small retailers, many who travel between the
islands to purchase products. The increasing role of Puerto Rico, and
mainly the U.S.V.I wholesalers, is creating competition for the BVI
wholesalers/importers.

BVI's total food and beverages imports were \$82 million in 2003. Retail
stores in the BVI target both the local population as well as tourists,
yet tourism represents a significant portion of sales for these stores,
usually about 40-70 percent. Retail contacts cite a significant drop in
sales between the high and low tourist seasons.

The United States is by far the nation's biggest trading partner in
terms of food and beverage products. The leading 83 percent market share
in 2003 is attributed to proximity, quality, and competitive pricing of
U.S. food and beverage products. The second largest trading partner is
the United Kingdom and Canada, each which provide about 3% of imports to
the islands. Barbados, St. Maarten, and St. Martin each provide
approximately 1% to the island. Other trading partners include other
Caribbean and South American countries, including Colombia, Dominica,
and St. Vincent & the Grenadines, although these amounts are small in
comparison to the amount of imports from the US.

![](media/image2.wmf)

> Source: BVI Development Planning Unit

The U.S. food and beverage exports to the BVI are clearly a much higher
percentage than all other trading partners combined. Also, U.S. food and
beverage exports to the islands have been increasing steadily since
1999. The United States' ability to adapt to the island's food needs,
offering high quality food products at relatively low prices, has
enabled this increasing trend. Other main trading partners have
experienced relatively no change over the last years.

![](media/image3.wmf) ![](media/image4.wmf)

Source: FAS' Global Agricultural Trade System using data from the United
Nations Statistical Office

### Market Trends

-   Low fat and healthy foods are becoming more and more popular in the
    BVI due to the growing health conscious population.

-   U.S. products foodstuffs are advertised in the islands, due to the
    presence of cable television, making U.S. products popular.

  ----------------------------------- -----------------------------------
  **Advantages**                      **Challenges**

  Locals consider U.S. food products  Importers and retailers usually
  high quality.                       purchase food products in small
                                      volumes.

  BVI must import most of its food    
  needs due to a small and declining  
  agricultural sector.                

  The United States leads the food    
  and beverage market due to the      
  proximity to BVI and ease of        
  shipment.                           

  Tourists are mainly from the United 
  States, and Americans prefer U.S.   
  food products.                      
  ----------------------------------- -----------------------------------

# 

# Section II. Road Map for Market Entry

#### A. SUPERMARKETS AND GROCERY STORES

**[Entry Strategy]{.underline}**

The best way for a U.S. supplier to introduce a new product into the BVI
retail market is first by calling the company directly. If the buyer is
interested in the product, they may request that the supplier send
product literature and samples. If interested, many retail buyers then
would like for the U.S. supplier to meet with their local
importer/distributor. Importers also attend U.S. trade shows to meet
U.S. companies interested in the BVI food market. The Food Expo in
Puerto Rico is among the most popular trade shows for BVI importers.
Additionally, as more and more retailers are turning to the U.S.V.I. to
as their wholesalers, U.S. suppliers may go through these companies to
introduce new products.

### Market Structure

Roughly 80 percent of supermarkets' food products are imported directly.
They also wholesale and distribute major brands to their own and other
retail outlets, as well as to the food service industry. Grocery stores
import a smaller percent of their food needs, while other importers and
distributors supply them with the remaining amount. Some supermarkets,
grocery stores, and also BVI wholesalers/importers, import food products
through wholesalers in the U.S. Virgin Islands. Locally grown and
manufactured foods sold in the BVI retail market are limited and include
produce, water, and seafood.

***Product Flow for Imported Products:***

**[Company Profiles]{.underline}**

+--------------------+----------+-------+----------+------------------+
| **Retail Name and  | ###      | **No. | **Lo     | **Purchasing     |
| Type**             | ###### O | of**  | cation** | Agent**          |
|                    | wnership |       |          |                  |
|                    |          | *     |          |                  |
|                    |          | *Outl |          |                  |
|                    |          | ets** |          |                  |
+--------------------+----------+-------+----------+------------------+
| Bobby's            | Local    | 2     | Tortola  | Local Wholesaler |
| Supermarket        |          |       |          |                  |
|                    |          |       |          | & Direct         |
|                    |          |       |          | Importer         |
+--------------------+----------+-------+----------+------------------+
| K-Marks            | Local    | 3     | Tortola  | Local Wholesaler |
|                    |          |       |          |                  |
|                    |          |       |          | & Direct         |
|                    |          |       |          | Importer         |
+--------------------+----------+-------+----------+------------------+
| Riteway Food       | Local    | 4     | Tortola  | Local Wholesaler |
| Markets            |          |       |          |                  |
|                    |          |       |          | & Direct         |
|                    |          |       |          | Importer         |
+--------------------+----------+-------+----------+------------------+
| Supa Valu Ltd.     | Local    | 2     | Tortola, | Local Wholesaler |
|                    |          |       |          |                  |
|                    |          |       | Virgin   | & Direct         |
|                    |          |       | Gorda    | Importer         |
+--------------------+----------+-------+----------+------------------+
| Buck's Food Market | Local    | 1     | Virgin   | Local Wholesaler |
|                    |          |       | Gorda    |                  |
|                    |          |       |          | & Direct         |
|                    |          |       |          | Importer         |
+--------------------+----------+-------+----------+------------------+
| Rosy's Enterprises | Local    | 1     | Virgin   | Local Wholesaler |
|                    |          |       | Gorda    |                  |
|                    |          |       |          | & Direct         |
|                    |          |       |          | Importer         |
+--------------------+----------+-------+----------+------------------+

Tortola has three supermarkets and two others are located in Virgin
Gorda. While these supermarkets cater to both local customers and
tourists, tourism sales generally represent a larger percentage. These
stores have a wide variety of products available, including a large
selection of fresh produce. Both Tortola and Virgin Gorda also have
several grocery stores. These stores have a similar selection of goods
as the larger supermarkets, but on a smaller scale.

##### B. CONVENIENCE STORES 

**[Entry Strategy]{.underline}**

Convenience stores in the BVI are mainly specialty stores, as the food
and beverage retail stores are either larger grocery stores or smaller
mom & pop stores. These specialty stores range in products; two stores
sell only beverages, focusing on alcoholic beverages, while another
specialty shop sells a wide variety of spices. The specialty stores vary
on the percentage of direct imports, depending on the product they are
selling. The best way for a U.S. importer interested in introducing a
product to a specialty store is by contacting the store directly. The
owner may then ask for product literature or samples, or request that
the supplier work with local wholesaler/distributors.

### Market Structure

*Product Flow for Imported Products:*

Company Profiles

+----------------+---------+-------+-----------+----------------------+
| **Retail       | **Owne  | **No. | **L       | **Purchasing Agent** |
| Name**         | rship** | of**  | ocation** |                      |
|                |         |       |           |                      |
|                |         | *     |           |                      |
|                |         | *Outl |           |                      |
|                |         | ets** |           |                      |
+----------------+---------+-------+-----------+----------------------+
| TICO's         | Local   | 1     | Tortola   | Local/USVI           |
|                |         |       |           | Wholesaler, Local    |
|                |         |       |           | Retailer             |
+----------------+---------+-------+-----------+----------------------+
| Caribbean      | Local   | 1     | Tortola   | Local/USVI           |
| Cellars        |         |       |           | Wholesaler, Local    |
|                |         |       |           | Retailer             |
+----------------+---------+-------+-----------+----------------------+
| Sunny Caribee  | Local   | 1     | Tortola   | N/A                  |
+----------------+---------+-------+-----------+----------------------+
| Sailor's Ketch | Local   | 1     | Tortola   | N/A                  |
+----------------+---------+-------+-----------+----------------------+
| Ms. Penguin's  | Local   | 1     | Tortola   | Local/USVI           |
|                |         |       |           | Wholesaler, Local    |
|                |         |       |           | Retailer             |
+----------------+---------+-------+-----------+----------------------+

##### C. TRADITIONAL MARKETS AND MOM & POP SHOPS

**[Entry Strategy]{.underline}**

Mom and pop shops do not import directly from the U.S., not because they
are not interested in doing so, but because of high freight costs and
their low quantities of imports. Many of these retail outlets get their
product from local importers or larger retail outlets on the islands.
Therefore, the best way to introduce a product is through a local
importer or distributor. Also, many of the owners of these small
suprettes travel to Puerto Rico to purchase supplies for their retail
outlets.

### Market Structure

*Product Flow for Imported Products:*

####### 

**[Sub-Sector Profile]{.underline}**

BVI has about 45 mom & pop shops, located throughout the islands. On the
majority of the smaller islands, these suprettes are the only retail
outlets available. These small "suprettes" sell a small selection of
food, mainly dry goods, and usually a wide selection of beverages. Some
carry a small selection of produce. These stores have no scanners, and
usually only one small cash register. They sell to both tourists and
local customers, but the latter make up the majority of their sales.

# Section III. Competition

Competition for food and beverage products is led by the United States,
which supplies most of the nation's total needs. The high quality and
competitive prices of U.S. food products aids in forming the market for
U.S. goods in BVI, along with the proximity of and close ties between
BVI and the U.S. Virgin Islands and Puerto Rico. All of these factors
give U.S. food and beverage exporters an advantageous position. The
biggest competitors are France, which supplies a large amount of
alcoholic beverages to the BVI through St. Martin, the U.K., Canada and
other Caribbean countries such as St. Maarten, Barbados, Trinidad &
Tobago and St. Vincent and the Grenadines. In the cases of the Caribbean
competitors, proximity plays the main role.

The following products and countries compete with U.S. products:

-   **Beef:** Argentina, France (via St. Martin)

-   **Pork:** Brazil

-   **Fresh Produce:** St. Vincent & Grenadine

-   **Seafood:** Local producers

-   **Dairy Products: France** (via St. Martin)

-   **Alcoholic Beverages:** France, Australia, Chile

-   **Non-Alcoholic Beverages:** Canada, Trinidad and Tobago, Dominica

-   **Bottled Water:** Scotland, UK, local producers

-   **Bakery Ingredients:** Canada, UK

The product competition with other nations varies among categories. The
United States dominates the market in the categories shown in the
following table. U.S. food products comprise more than eighty percent of
the market share for fresh/chilled/frozen red meats, poultry meats,
sugars/sweeteners/beverage bases, fresh vegetables, fruit & vegetable
juices, and vegetable oils.

  -------------------------- ---------- --------------------------- ----------
  Top 10 U.S. Food Products                                         
  in BVI Import Market for                                          
  2003                                                              

  **U.S. High Value Food     **Market   **U.S. High Value Food      **Market
  Product**                  Share**    Product**                   Share**

  Red Meats                  100%       Vegetable Oils              80%
  (Fresh/Chilled/Frozen)                                            

  Poultry Meats              100%       Wine and Beer               46%

  Sugars, Sweeteners, &      100%       Rice                        37%
  Beverage Bases                                                    

  Fresh Vegetables           99%        Red Meats                   21%
                                        (Prepared/Preserved)        

  Fruit & Vegetable Juices   92%        Snack Foods (Excl. Nuts)    15%
  -------------------------- ---------- --------------------------- ----------

###### Source: UN Trade Data 

###### Section IV. Best Prospects

##### 

##### A. Products Present in the Market Which Have Good Sales Potential

Almost all U.S. goods are present on the islands, and due to cable
television via satellite from the United States, the BVIslanders are
exposed to new products. All U.S. products have good sales potential in
the BVI.

##### B. Products Not Present in Significant Quantities but Which Have Good Sales Potential

-   "Healthy products"

##### C. Products Not Present Because They Face Significant Barriers

> The BVI is an importing country, and depends heavily on its imports.
> Therefore, there are no food products which are restricted from entry.

Goods below are produced locally, yet on such a small scale that they
are still heavily imported:

-   Seafood

-   Water

-   Locally grown types of vegetables

###### Section V. Import Regulations 

Importers are required to obtain an import permit from the Department of
Agriculture for the importation of produce, including a phytosanitary
certificate. Customs duties rates range from 5-20% on some imports. Some
food products are duty free, and others are marked with a dollar value
duty. The table below outlines some of the duties placed on goods
imported into the BVI.

  -------------------------------------------- --------------------------
  Top 10 U.S. Food Products in BVI Import      
  Market for 2003                              

  **U.S. High Value Food Product**             **Import Duty**

  Beef, fresh and fresh                        5%

  Chicken, frozen                              Free

  Milk, whole                                  5%

  Butter                                       Free

  Cheese                                       5%

  Produce                                      5%

  Breakfast Cereals                            10%

  Juice                                        10%

  Beer, malt                                   U.S. \$1.10 per gal.

  Wine                                         U.S. \$1.20 per gal.
  -------------------------------------------- --------------------------

> Sources: BVI Customs Departments

###### Section VI. Contact Information

###### 

A. For more information on the British Virgin Islands and a list of
importers for your U.S. product, please contact:

**Caribbean Basin Agricultural Trade Office**

**Foreign Agricultural Service**

**United States Department of Agriculture**

909 SE 1^st^ Ave., Suite 720

Miami, FL 33131

Phone: (305) 536-5300

Fax: (305) 536-7577

E-mail: <cbato@cbato.net>

Paul Hoffman, Director

E-mail: <cbato@cbato.net>

Omar González, Deputy Director

E-mail: <omar@cbato.net>

Graciella Juelle, Marketing Assistant

E-mail: <grace@cbato.net>

Please visit our website for more reports and information on The British
Virgin Islands and other Caribbean Islands:

[http://www.cbato.fas.usda.gov](http://www.cbato.fas.usda.gov/), click
on "U.S. Exporters"

**B. Other Sources of Information on The British Virgin Islands:**

BVI Chamber of Commerce and Hotel Association

PO Box 376, Road Town\
James Frett Building\
Tortola, British Virgin Islands

Tel: (284) 494-3514\
Fax: (284) 494-6179

BVI Customs Department

Tel: (284) 494-3475

BVI Ports Authority\
Port Purcell\
P.O Box 4, Road Town\
Tortola, British Virgin Islands\
Tel: (284) 494-3435

Fax: (284) 494-2642

BVI Tourist Board

Caribbean Office

P.O. Box 134

Road Town, Tortola, BVI

Tel: 284-494-3134

Fax: 284-494-3866

email: <bvitor@bvitouristboard.com>

Department of Agriculture

Paraquita Bay

Road Town, Tortola

British Virgin Islands

Tel: (284) 495-2532

Fax: (284) 495-1269

Department of Information and Public Relations\
Government Central Administration Building\
33 Admin Drive\
Road Town, Tortola\
British Virgin Islands

Tel: (284) 468-3701, ex. 2139\
Fax: (284) 494-6877\
Email: <gis@bvigovernment.org>

Development Planning Unit\
BVI Government\
Central Administration Complex\
Wickhams Cay 1\
Road Town, Tortola\
British Virgin Islands

Office of the Comptroller of Customs

Road Town, Tortola

British Virgin Islands

Tel: (284) 494-3475

Fax: (284) 494-6906

Contact: Mr. V. Hodge

Trade and Investment

Central Administration Complex, West Wing, 1st Floor

Tel: (284) 494-3701 ext. 2008\
Fax: (284) 494 5676\
Email: <trade@bvigovernment.org>