Rum industry experiencing ‘a global renaissance’

“exporTT stands ready to provide information on market intelligence, facilitate trade missions and a range of other services that can help build export capacity.”

Gopee-Scoon made the statement after noting that according to the West Indies Rum and Spirits Producers’ Association (WIRSPA), “over 60 percent of the region’s rum production is exported, which is approximately US$550 million annually. This industry is therefore a significant earner of foreign exchange and we would like to see these figures go up.”

The minister was speaking on Monday evening during the opening ceremony of a Technical Workshop hosted by WIRSPA and Angostura Holdings Limited (Angostura) at the CL Financial booth, Queen’s Park Oval, St Clair, Port-of-Spain.

WIRSPA members from Antigua, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana. Jamaica St Lucia, Suriname and of course TT, spent this week (September 12 to 15, 2016) in workshops at the Angostura distillery in Laventille.

There, staff from Angostura’s own quality department will provide practical demonstrations and presentations on how to improve quality assurance in distilleries.

Gopee-Scoon noted that, “According to the International Wine and Spirits Record (UK), following a 15-year period of exponential growth, global rum sales, by value, are expected to continue rising given the propensity towards higher-value rum products.”

“Conditions such as an increasing trend towards premium and super premium rums, increased popularity of cocktails among younger generations and a growing preference for spiced or flavoured rums augur well for this industry in both mature and also in emerging markets.”

The Trade Minister added that Caribbean territories have come to recognise the imperative of pursuing sustainable economic growth to achieve their social and economic development initiatives.

“In Trinidad and Tobago (TT), emphasis is on the diversification of the non-energy sector. In neighbouring CARICOM countries, generally the focus has tended towards a few agricultural products and tourism. Consequently, when faced with exogenous shocks in these areas, all spheres of society are challenged to ramp up initiatives that will widen our countries’ economic bases,” Gopee-Scoon stated.

Looking at the broader manufacturing sector in TT, the Trade Minister announced that Government is in talks with the relevant authorities to “implement a US Dollar Credit Line” for the sole use of manufacturers.

“Government is aware of some of the challenges facing the manufacturing sector as they pertain to shortages of skilled labour, obtaining foreign exchange and regulatory issues, among others. I want to assure you that we are working assiduously on short, medium and long-term measures to address all of these.”

“To this end, the Ministry of Trade and Industry is engaged in exploratory discussions with the Ministry of Finance and the Central Bank to implement a US Dollar Credit line that will be reserved for local manufacturers only. These may be small steps but they reflect the Government’s undertaking to support the business community,” Gopee- Scoon stated.

The Minister acknowledged WIRSPA’s on-going efforts to get redress for what it argues are unfair have rum subsidies in Puerto Rico and the US Virgin Islands.

“The Caribbean rum industry’s strength is well recognised as demonstrated by your engagement with pertinent authorities on rum subsidies in Puerto Rico and the US Virgin Islands, and the willingness to take this issue to the World Trade Organisation (WTO).”

“I too feel that I am better poised to represent you at COTED (the Council for Trade and Economic Development) meetings when these discussions come up. This industry is well organised, steeped in capacity building initiatives and an aggressive defender of fair-trade practices. This is applauded,” Gopee-Scoon declared, much to the appreciation of the WIRSPA members present on Monday evening.

Angostura Chairman, Dr Rolph Balgobin, spoke of rum’s “special importance to the Caribbean”, reminding that having been produced in the region for centuries, rum “is now recognised as one of the last remaining high added-value sectors” in the region. A sector that provides employment for 10,000 people and indirectly supports the livelihood of many more – “in fact, WIRSPA has estimated the number at 100,000 persons,” Balgobin stated.

“Today we see the industry experiencing a global renaissance, rum is now a global drink, and we remain the centre of the rum production world. It is part of the image of the Caribbean and is intimately linked to the tourism product of CARIFORUM countries. And yet,” Balgobin lamented, “of the 60 percent of rum exports, most of the revenue earned is from bulk rum, not branded Caribbean rum.”

The Angostura chairman pointed out that the “dilemma” WIRSPA continues to face is the fact that the real value lies in the branded rum business - of the 28.8 million litres of global imported rum volumes (IWSR 2014), 42 percent is sold by four players: 21 percent is sold by Bacardi, 14 percent by Captain Morgan (Diageo), four percent by Barcelo and three percent by Appleton.

“Of these, the significant shares of the top two appear to be supported, at least in part, from the Rum Cover- Over tax subsidy, which is paid by the US government to overseas territories.”

Balgobin made it clear however that “while we would take issue with terms of engagement which appear so manifestly unfair, we have not rested on our laurels.”

“WIRSPA has worked hard on the ACR (Authentic Caribbean Rum) Marquee program, and has provided a framework and vision of where to take the Caribbean rum industry, beyond the lifetime of EU trade preference. We thank them for it and we re-affirm our support for it. We’ve even changed our labels to include the mark.”

Balgobin also said that as part of its commitment, Angostura will continue the move from Bulk to Branded business, so that it can avoid the historical mistake of exporting commodities or near commodities for low margins.