Posted by: ivetteromero | February 10, 2013

Rum War Threatens Small Caribbean Producers

sugar-cane-for-making-rum

In a conversation with Cap’n Jimbo (rum lover), the author (whisky lover) discovers that small Caribbean rum distillers are being crowded out of production by government-subsidized, big-moneyed producers. He then read Cap’n Jimbo’s note (below) and decided to sign a petition labeled “Your help is needed to help save Caribbean rum.” See excerpts of the Cap’n’s note below:

I know that regardless of any of our petty differences (that naturally exist among men and women of generally good will) I am sure we all share a love for the fine rums that represent over 300 years of continuous production and development by wonderful Caribbean distillers. These wonderful Caribbean rums are now in danger of going out of business. In general these are small to medium size enterprises and include the hundreds of rums that we together have reviewed and blogged about. I’m talking about Mount Gay, Seales, Appleton, Wray & Nephews, Sangster, Myers, Barbancourt, Brugal, Barcelo, Ron Matusalem, Flor de Caña, the Demeraran Distillers Ltd., Ron del Barrilito, and so many more.

What has happened are two things: an exponential growth of rebates to the Big Three (Diageo, Fortune and Bacardi) in the US Virgin Islands (USVI) and Puerto Rico. Import taxes from the USVI/PR and surprisingly also from all their small Caribbean competitors, are almost all rebated – to the benefit of the Big Three alone. These rebates were only about $87 Million to the USVI in 2007, but have escalated to about $500 Million annually today to the USVI and Puerto Rico. The pressure on the Caribbean distillers has increased and reached a breaking point in 2012.

Then things got much, much worse when the USVI instituted a “rum war” against Puerto Rico last year. What happened is almost unthinkable. The USVI gave Diageo nearly $3 billion–not million, billion!–in subsidies. These subsidies were so rich that they amount to more than double the cost of actually producing rum! Diageo is actually being paid to produce rum. The USVI also gifted Fortune Brands (Cruzan) $1 billion, yes billion–for all manner of free improvements and facilities, including a guarantee that Cruzan can buy molasses for just 16 cents/gallon – far under the market price of $2.00/gallon that the Caribbean producers must pay.

The result threatens all the Caribbean distillers, but especially those in Barbados, Jamaica, the Dominican Republic, and Guyana to name the most important. Still, smaller Caribbean labels everywhere fear for their survival, to no longer be able to produce rum at a competitive price. [. . .]

Key points: This is real and serious, and it is happening right now; Caricom has concluded that these subsidies constitute a violation of WTO (World Trade Organization) rules regarding fair trade [. . .]; a Formal Petition has been created and continues to grow and garner signatures. Please read, sign if you agree, and aggressively promote it. Adding personal comments is possible and encouraged. It is here: http://www.gopetition.com/petitions/stop-massive-u-s-rum-subsidies-to-the-usvi-and-puerto.html

If you need links to any of this material, please don’t hesitate to ask Cap’n Jimbo [. . .]. The magic number will be 20,000 signatures, at which point the petition will be formally filed with the WTO, WIRSPA, CARICOM, the EU, the Office of the US Trade Representative, and with selected members of the US Congress and appropriate committees. [. . .] Let us stand together in support of our Caribbean friends! Thank you… Cap’n Jimbo and Sue Sea, The Rum Project and Forum

See more at http://rumproject.com/ and http://rumproject.com/rumforum/

For original article, see http://www.canadianwhisky.org/news-views/rum-war-threatens-small-caribbean-producers.html


Responses

  1. Hi Ivette,
    Thanks for spreading the word.
    Davin

  2. [...] Rum War Threatens Small Caribbean Producers [...]

  3. Thanks for bringing attention to this issue. At the Rum Project we join the effort to Save Caribbean Rum from being destroyed by Diageo, Fortune and Bacardi in the form of billions of dollars in tax and other subsidies.

    American citizens should object loudly to such corporate rapaciousness.


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