St. Thomas merchants expressed grave concerns about the state of their businesses to Delegate Donna Christian-Christensen at a meeting Friday night.
Christensen called the meeting to update retailers about the status of selling tobacco "for export only," but she ended up hearing about more than concerns over tobacco sales.
The business people, made up of Main Street merchants and liquor and cigarette wholesalers, said they felt they were under attack on various issues because U.S. Customs was selective in enforcing laws.
The advantage the U.S. Virgin Islands has over other Caribbean destinations is that U.S. visitors can take home up to a gallon of liquor and five cartons of cigarettes duty free. From other destinations in the region — St. Maarten, for example — U.S. tourists can take home only one liter (a little less than a quart) of liquor and one carton of cigarettes without paying duty. But the group said the law is not being enforced.
Businessman Vinnie Mohanani pointed out that local merchants pay 6 percent duty to import foreign-made liquor plus gross receipts tax — and therefore cannot sell the goods as cheaply as St. Maarten and other non-U.S. islands. He said a bottle of Absolut vodka that sells for $8.95 in St. Thomas can go for $6.95 on St. Maarten.
Mohanani said when customers see the higher price on liquor in the territory, they don't buy it. And because they think other merchandise is priced higher in the Virgin Islands than elsewhere, they don't buy it either.
Plus, he said, cruise passengers can buy duty-free merchandise onboard the ships.
If U.S. Customs "can turn its head the other way on so many other things, why not a six-month moratorium" on enforcement of the tobacco "for export only" law, he asked.
The confiscation of tourists' cigarettes came to light earlier this week when the Source learned that officials in Miami were making cruise ship passengers turn over all cigarettes they had purchased that were marked "for export only." The action was the result of a law that took effect earlier this year that officials say was never intended to apply to tobacco purchased for personal use, but that nonetheless is being enforced on personal use purchases outside the U.S. mainland.
This latest controversy is only part of the picture. With trends in smoking and drinking changing, Mohanani said, sales aren't like the "old days."
"In the old days, we could sell 500 boxes of cigarettes a day to the Norway alone," he said. "Now on a ship with 3,000 people it's a miracle if we sell 200.
"We're talking about losing our livelihoods. It seems like we have a noose around our necks, and it's getting tighter and tighter."
Another issue of current concern not directly affecting the retailers came up at the meeting too. Foreign sales corporations, which bring millions of dollars into the territory and provide some jobs locally, have come under attack by the World Trade Organization and could be phased out.
Christensen agreed that it did seem as if the Virgin Islands was being assaulted on all sides.
Editor's note: See earlier stories "Delegate: Bad News, Good News on Tobacco" and "Blow to Foreign Sales Corps. May Be Fatal."
