Businessman issues response
The discrepancy and issue of local liquor prices was not addressed in the Ombudsman Office investigation into claims of wrongdoing in relation to import duty compliance at the Ministry of Revenue.
This is the response from the Owner of Le Well, Manu Meredith to Ombudsman, Maiava Iulai Toma, whose office investigated the claims.
Mr. Meredith had been corresponding with the Ministry of Revenue since 2015 over allegations about unfair practices involving liquor taxes and prices.
Earlier this year, he asked the Ombudsman’s Office for an investigation after numerous attempts for an explanation went unanswered.
But the Ombudsman’s investigation found that the calculation for trading purposes of the landed cost for “the wine” in the shipments investigated accord with widely used practice.
“The figures and values used in the calculations accord with Customs documents relating to the shipments of the merchandise,” the report reads.
“Presumption of misconduct from 'low prices' charged for 'the wine' in Apia is not sustained."
“The Ombudsman cannot say with any degree of confidence that quantities of wine imported correspond to quantities submitted in invoices during the period investigated due to the lack of spot checks."
“The Ombudsman notes with satisfaction that the Ministry has instituted appropriate surveillance measures since June 2016 to enhance compliance with Customs requirements and appropriate standards.”
In a letter dated 6 September 2017, Mr. Meredith acknowledged the report by the Ombudsman Office.
“Your report however does not address our request to your office to also look at the discrepancy/issue of local liquor producers under selling their products at prices that are lower than what they should be, if customs and/or excise tariff are paid in accordance with legal rates,” Mr. Meredith writes.
“We respectfully request the extension of your spot checks to include reviews of local liquor pricing by local providers of Boom Vodka and Fagu Maso."
“The apparent underpricing of these products are undermining our business directly in terms of our wine and liquor sales, whilst also depriving Government of revenue.”
The businessman point Ombudsman Maiava to an email sent to Chief Customs, Avalisa Viali-Fautua'alii in November 2016.
Mr Meredith pointed out to Maiava the intent of his communications with the Customs department is reassurance that there is fair competition across all suppliers of liquor imported, as well as produced locally.
He told Avalisa at the time “I appreciate you will not share any information on liquor retailers wholesalers, with our company."
“However I have done my own research on certain products and have found that local producers are not adhering to tax requirements as set forth by your department."
“Local spirits with a 30% over alcohol content should have a tax of $19.96 per ltr, plus 15% VAGST $22.95 (not including labor, materials, profit etc). However the selling prices for local liquor 1ltr (claiming to have 45% alcohol content) is $21.00 (including VAGST) and Maso (40% alcohol content) is priced at $23.60 (including VAGST)."
“The prices that we have researched assume these local liquor products have less than 30% alcohol content), then the pricing would be in line with local tax requirement.”
“I do not want to assume that your office or some officers are overlooking these matters, but I want to be reassured the competition from local businesses are all treated fairly.”