“The advertising ban on alcoholic beverage has prevented new brands from accessing the market”

Alexis Harel, the Managing Director of Grays, addressed several pertinent questions from journalists during a ‘Corporate Breakfast’ with the media last Wednesday. Topics ranged from the existence of a parallel market for rums and spirits on social media, Grays’ international ambitions, and the impact of the advertising ban on alcoholic beverages, to the economic situation on the eve of the budget presentation. BIZWEEK presents the full Q&A session. 

Why are local rums not as visible as imported rums in supermarkets? 

Mauritius has been absent from the quality rum market for a very long time. Historically, the government passed a law to control illicit distillation due to its harmful effects on the population. This, along with other politically linked regulations, prevented the production of quality rum for nearly 30 years. As a result, we vanished from the market. It was only in the 2000s that these laws were revised, allowing us to reinstate production facilities. We have been back in the market for about twenty years, but it will take time to compete with brands that have been established for the last hundred years.

There is a parallel market for rums and spirits. They are sold freely on social media at a lower price, and without the MRA seal. Anyone can get them. What do you think of this situation?

Indeed, I see it as you do. We know the sources and the issues involved. It merely requires the will to stop it. Yes, we suffer from it, but I can’t comment further.

I would have liked to provide evidence. I don’t want to make a statement without scientific proof. But I think you have the elements to find the answer.

What is positive today is that the tax is specific, so quality products don’t pay more than others. As long as everyone pays the tax, I have no issue. 

The tax on champagne, however, is extremely high. The tax on spirits and cane-based alcohols is expensive, yes.

I don’t think it will continue to increase, but it seems we have reached a reasonable limit. If everyone plays by the same rules, I have no problem.

Have you been able to quantify the rum and spirits market post-Covid?

I don’t have the exact figures in mind. Generally, it’s a stable market, as the population is ageing.

How do you position yourself concerning the country’s ecosystem at the moment?

There is still a lot to do. Our role is to contribute our small part, trying to see what we can do to help. For example, our Finance Director has worked extensively on a bottle recycling project. Our goal is to raise awareness and educate the younger generation so that ecology becomes part of their DNA. For older people, it’s very difficult to change habits. But today, apart from our role as an economic player, it’s really about raising awareness and rethinking our way of life.

The government can help us, but it’s not the private sector’s role to wait for the government to act. It’s up to us to take the lead and bring everyone on board. There is nothing in the legal framework today that prevents us from doing what is necessary.

You are already engaged in the European market. Is the Indian market also something that interests you?

Absolutely. The Indian market is extremely interesting. India is a priority and, for me, the future largest economy. The Indian context remains quite complicated. There are several states, each with its own laws. Economic fluidity is not very evident, but it is very important. We have worked a lot on China. Unfortunately, Covid affected us, and we withdrew from China. We went to China with an organisation and employees; we really invested. Covid lasted so long that we had to stop. In China, at the moment, the economy is not very flourishing, but it’s a market we have in our sights.

Does the African continent interest you?

The African continent interests us, especially the East African markets, due to their proximity.

There needs to be a budget that limits inflation, especially for consumers

Besides rums, there is also a parallel market for cosmetic products. If you go on TikTok, they are sold freely and at low prices. How do you react to this?

Anything sold in the parallel market needs to be approached with caution. You have to ask: Is the product a fake? When you see a perfume at 75% cheaper, something doesn’t add up, even if there is very little tax on perfumes. You really have to be careful with fakes, especially for perfumes.

What do you think has been the impact of the ban on advertising alcoholic beverages?

The ban has prevented new brands and new entrants from accessing the market. It is very difficult today for someone who wants to enter this sector to do so without communication. It’s quite complicated. For example, we have a million tourists coming to Mauritius. We would have liked to reach them through communication so that they become our consumers at home.

Is this something that deserves to be changed?

I think a code of conduct should be established, but any prohibition is never beneficial. In the United States and Asia, it hasn’t worked. Advertising will make a consumer buy from one brand over another, but won’t necessarily make them consume more. It’s regrettable. The key word for us is moderation. Everything we do must be in moderation. There must be a code of conduct. For example, drink or drive, you have to choose.

Usually, the image we have of Grays is the sale of spirits and rum. How do you diversify how Mauritians see Grays? Because Grays is also makeup, pharmaceutical products, etc.

It’s something we can’t do overnight. So far, we have prioritised our brands in our communication. Now, we have changed our strategy to communicate more about Grays itself. However, it’s not very easy, because when we communicate about M.A.C or L’Occitane en Provence, we can’t put Grays alongside, because the brand has its own specifications.

Also, when we communicate about Grays, it is primarily as an employer of choice. We want to attract talent. The challenge today is retaining and attracting talent.

We are on the eve of the budget speech. What are your concerns?

Above all, there needs to be a budget that limits inflation, especially for consumers. The more we spend, the more the rupee needs to hold its value so that we can repay that basket. So, a non-inflationary budget would help consumers retain their purchasing power.

Several sectors are facing a labour shortage. Is this also the case for Grays?

Certainly. We need to create an economic environment where young people feel comfortable and want to stay. It is a challenge for Mauritius to do what is necessary so that our young people stay.