Economic Columnist – Edwin Laurent CMG OBE
In Caribbean news, the Caribbean did really well at last month’s International Spirits Challenge in which distilleries and alcoholic drinks from all over the world competed.
Chairman’s Reserve Finest St Lucia Rum, won the overall trophy for rum, ahead of big brands like Captain Morgan, Bacardi and even the renowned Ron Zacapa 23 distributed by the world’s largest drinks company Diageo.
According to the August 2013 edition of Drinksint.com, the St Lucia Distillers, hidden away in the banana fields of the lush Roseau valley, won the individual Distillery Trophy from across all spirits’ categories.
You might of course expect these awards to feed optimism and be followed by marketing success; but all is not well.
Double Gold Chairmans-Reserve-Rum. Photo courtesy microliquor.com
Caribbean rum is now facing its most serious challenges that will make competing more difficult and can result in severe losses in export markets.
CaribDirect will carry a series of articles that explore what the region is up against and consider actions that the industry and Governments can take to help safeguard their interests in the international rum trade.
Rum is serious business
Its association with relaxation, entertainment and pleasure, can too easily detract from the serious business, the jobs, the livelihoods that is Rum. This is the product that is most intimately associated with the Caribbean and its history.
International sales in rum have been booming in recent years with considerable scope for expansion in both traditional and non-traditional markets.
Brands like Royal Oak, El Dorado, Chairman’s Reserve, Appleton and Mount Gay are attracting a growing international following well beyond the Caribbean.
The regional industry provides 10,000 jobs and is the most valuable agriculture-based export with earnings of US$500 million.
For the industry to prosper however, it must be able to export on a profitable basis since the regional market is too limited to absorb the volume of rum that is produced.
Ideal after a hard day but is this respite at risk. Photo courtesy www.sheknows.com.au
Whilst the quality of high-end aged rums can be enough to retain the allegiance of those “true aficionados” who can afford to indulge their tastes, they are though only a small minority of consumers.
Most of the rum that is traded internationally is not bottled and branded, but is shipped in bulk; the most price sensitive sector of the market. Success in the international rum trade is therefore determined by commercial considerations, principally relative costs.
The Caribbean is concerned that recent developments in the US and EU, its two major markets, can make it more difficult to compete. The changes will potentially lower the costs borne by other suppliers who can therefore reduce their selling prices and grab market share from the Caribbean.
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The next article in the series will look into the problems the Caribbean rum faces in the USA where rum produced in Puerto Rico and the US Virgin Islands receives generous Government subsidies that the Caribbean has been vigorously campaigning against.
