Diageo Deal Just Gets Sweeter
(Editor’s note: Yet another twist on this sweet deal from one of our readers.)
Well, here we go. Sugar prices have reached a 28 year high and are forecast to rise further. The main engine for the price increase is a combination of increased demand for sugar (for ethanol production) and decreased production, primarily in India. These trends will probably get worse in the future. For example Florida based U.S. Sugar Corp., the nation’s largest sugar producer, has agreed to sell 187,000 acres of sugarcane farmland to the State of Florida to bolster Everglades preservation. Naturally, the same market trends impacting sugar prices are also effecting molasses prices.
Of course, the powers that be at Diageo, PLC and their Captain Morgan division are unconcerned about these trends. They were able to convince the friendly (and somewhat gullible) Government of the Virgin Islands to guarantee them a price of no more than $.16 per gallon for the next 60 years. Forget everything else Diageo got in the deal (a total of $2.7 billion in benefits, according to the Blooomberg article linked below) this gift alone makes this a blockbuster deal for the rum makers.
I really hope the 40 Virgin Islanders who get hired because of this arrangement appreciate everything that the people of the Virgin Islands have sacrificed for their jobs
http://news.bbc.co.uk/2/hi/business/8193390.stm
http://www.guardian.co.uk/environment/2008/jun/24/conservation.usa
http://www.business-standard.com/india/news/high-molasses-prices-may-turn-alcohol-costlier/357757/
http://www.mydigitalfc.com/foods-and-drinks/molasses-prices-rise-low-cane-output-289
http://www.bloomberg.com/apps/news?pid=20601109&sid=amp5wXx35fkc
Add to that the growing number of ex-consumers of alcohol, the ones who’ve taken the time to learn exactly what the effects of drinking are, long- and short-range, on the human system.
Alcohol will eventually go the way of cigarettes.
I don’t know if you all heard, but here we go again. Diageo said that upon starting up this project, there would be x amount of construction jobs for the local people. The administration was so excited about the ground breaking ceremony and said from the beginning phase jobs would be created and that it is part of the so-called local stimulus. Well, Senator Nielly O’Reilly reported on the Alvin G news cast on Friday afternoon, August 14, 2009 that she received numerous phone calls into her office from local heavy equipment owners concerning diageo not hiring any local contractor. According to Senator O’Reilly, Diageo brought in two contractors from states side, who in turn shipped in all their heavy equipment to do all the clearing you guys have been seeing on the Melvin Evans Highway (former Vialco and next to Cruzan Rum property). To add insult to injury they still did not hire any locals to operate their heavy equipment, it was outsiders. If you think this was the last of the insult, think again – the two outside contractors are operating in the Virgin Islands without, I repeat, WITHOUT BUSINESS LICENSES. Just the clearing and cutting of these two properties have already paid out thousands of dollar$ to outside contractors and their outside operators. Our people are left out in the cold and this administration talks about local stimulus. This is outragous to say the lease. Senator O’Reilly said that she has a meeting setup for this coming Monday with Diageo and the two contractors. She said that she would not accept any apologies, but will hope that they would remedy this situation to put our local contrators to work with their own local equipment. This is how they will make more money. The senator said she was not suprised, but disappointed that Diageo did not live up to what they told the people of the VI. I very much agree with Senator O’Reilly. We need to stand up and speak out against this practice. I wonder what Free-speech Roger Morgan would say to this latest development where Diageo has bypassed our local contractor and their heavy equipment and brought in outside contractors with their own operators to STEAL the very first phase of this project and remember…they don’t have licenses to operate locally. SPEAK OUT MAN
a friend had 30 high school summer interns,the friend said all but about 2 of were worthless,they stole from each other,slept on the job,clocked in and left for the day and came back to clock out,refused to do their job assingments,friend said never again
This latest development with the contractors doesn’t surprise me. Remember Diageo was lobbying Congress to reduce the $13.50 excise tax rebate while at the same time negotiating a deal with the Virgin Islands Gov’t based on that amount? I remember how all supporters talked about jobs, including Diageo themselves, and now they turn their back on contractors able and willing to do the job.
Just think how the price of molasses might increase over the next 30 years, not to mention the next 60 years. We were warned by Bryan and Mapp. Certain St. Thomas senators refused to listen.
By the way, “not again” what does it matter what RM has to say about anything ? Since when does his opinion matter?
Governor John P. de Jongh, Jr., his bandits, pirate and sponsors thought it was really funny when they threw dirt on top of the Diageo deal to bury the sweeten fine prints. “Diageo can do as they please and hire whomever they want to work at its distillery”.
Now we know why they were laughing so hard in this picture. They obviously were laughing about how they just had stuck another corrupted deal right down the throats of Virgin Islands residence. This senator (Carlton Dowe) always seems to be at the scene of crimes waged against the people of the Virgin Islands.
http://www.flickr.com/photos/governordejongh/3821194680/sizes/l/
It is pretty ironic that there is a pirate in that groundbreaking ceremony picture. One can only imagine how many of those precious 40 jobs will be earmarked for political cronies, friends, and family as opposed to competent skilled residents in need of employment.
From the first time I heard the governor talked the Diageo deal, I knew deep down in my soul that something was seriously wrong. The majority of Virgin Islanders were against this proposal from the beginning; yet the governor continued to push the deal on us. This show that he made that deal for himself, and not for US!!!
Let me play Devil’s Advocate for a minute…
We don’t want businesses like Diageo.
We don’t want energy companies like Alpine.
We don’t want to manage our resources (overfishing).
We don’t want resorts like Williams and Punch.
We don’t like anyone in the government.
We don’t want to fix up our old decaying buildings.
We don’t seem to want or support tourism.
What do we want?
we want the truth
You are glib, What Ah Ting, you are clever. But you are far to nebulous.
How will we know the truth when we see it? It appears we have never seen it. We may have lost the ability to recognize it.
I hear you Bull Foot and you have a very valid point. However, I think we should evaluate the economics of these deals properly before we enter into them. Has anyone seen the economic analysis of the Diageo deal? I’m totally pro development because it means jobs for residents here who desperately need economic opportunity. However, I do not trust any elected official to have done the apprpriate economic analysis on the deal. If so, I’d like to see it for myself. I think the core issue is that we don’t trust our elected officials to do the right thing for the people they represent. Instead its the same old lining of their own pockets at the expense of the taxpayers… sigh…
We don’t want the truth, either.
Black people in the VI hate each other. They have no appreciation for any black elected official. It is easy to criticize any proposal or contract. It is the norm to be auspicious of outside investors, developers or projects to help boost the economy.
The critics never have a better solution.Most of the pessimists are from St. Croix.If a Crucian governor is elected, there would be even stronger opposition.
VI people are confused. Diageo representatives would be insane to succumb to the pressure.
VI Restore Hope is so desperate right now that by the end of this day they will begin to stone each other. Senator Roosevelt David did you take out any loans with the VI EDC that have not been repaid? Do any members of your terrorist organization, VI Restore Hope, have unpaid loans with the EDC. Do you agree that these outstanding loans should be listed in the local media so that the world can see that you and your terrorists have used this funding source to support activities against the people of the Virgin Islands? Have you ever made this comment: “the Virgin Islands are The United States of Nevis”?
CONFIRM OR DENY?
While we are checking loans what about GERS loans or GERS mortgages to individuals? I’d like to see THAT list published here.
I wonder why Crucians are such pessimists Bull Foot. Could it be that because the last new resort that was built here (excluding the Divi expansion which was forced by the CCC) was Carambola way back in 1986? I wonder how much building has commenced across the sea since 1986. I’m just sayin’
Confirm or Deny,
I trying to find the link of continuity between what you wrote and what everyone else is writing about, namely Diageo. How does VI Restore Hope, Nevis, Sen. David, et.al. get into Diageo and the logic stream written above?
BFS, it looks like it could have been a response to post 13. “VI people are confused. Diageo representatives would be insane to succumb to the pressure.” Destroy Hope has been running a propaganda campaign to distract from important issues. CD might have hit back…
Anon: ok, got it. I see I need to get up to speed with this VI ‘Destroy’ Hope thing.
Us: good question, one that will continue to plague St. Croix for some time to come, I’m afraid. But it may not be purely pessimism. It may be xenophobia disguised. Because look, St. Croix is, unfortunately, at a geographical disadvantage, internationally speaking.
You know that tag line: Location, location, location. Those that have it, thrive. Others must close their doors. We are just too far away from trade, the exchange of ideas, people, etc. No boats come here from STT. But over there, it’s non-stop back-and-forth, give-and-take. That’s how progress is learned.
I don’t think St. Croix should be spending much more precious time or money pushing tourism. That’s for the other islands. If visitors come here, great. If not, that’s ok too.
I think St. Croix is destined for something else, equally or greater than tourism. We’ve got to start thinking out of the box. I mean, way out.
Oh, and becoming independent doesn’t work, so we’re not going there.
BFS, I agree. The way St. croix was created geographically, it was never meant to be a tourism distination. The problem is that a number of people on the Big Island who want to compete against St. Thomas in terms of the number of cruise ship visits, and the governor is too busy trying to cater to that particular group. What the Crucians need to do is try to build up agriculture and take better care factories that export goods, like Cruician Rum and the milk factory that produce the blue carton.