The Government of Barbados and business community have been asked to help rescue the local rum industry in the face of unfavourable competition and high operating costs.
The appeal for support came last night from Jean-Marie Laborde, the Chief Executive Officer of Mount Gay Distilleries French-based majority owners Remy Cointreau.
Addressing the opening of Mount Gay’s $3 million aging bond in St. Lucy, Laborde told the gathering that included Prime Minister Freundel Stuart, that the cost of operating in Barbados was comparatively high versus competitors in the international rum industry.
“This is as a result of the scarcity of locally produced molasses, high energy, telecommunications and labour costs. These constraints are compounded by the exchange rate factor given Mount Gay’s dependence on imported materials,” the CEO noted.
“Moreover, Mount Gay is not benefiting from any subsidies compared to other rum brands which are produced in some of the other islands in the Caribbean, namely the USVI and Puerto Rico.”
The senior rum executive said that despite these competitive disadvantages, maintaining Mount Gay’s 310-year-old authenticity and roots by manufacturing in Barbados, was fundamental.
He said the parent company was proud of the valuable heritage of the local distiller and its continued support was evident from the $3.5 million which Remy had invested here in capital expenditure annually over the past five years.
“For these reasons,” said Laborde, “we need the support of the Government of Barbados and the business community to sustain the growth of Mount Gay rum and the local rum industry.”
The chief executive officer suggested that the implementation of certain policies could assist by cushioning the impact of high operating costs.
“Such initiative would augur well as the rum industry is a major contributor to the foreign exchange earnings of this island. RC pledges its continued investment and support to Mount Gay Distilleries and the Mount Gay brand,” assured the parent company spokesman.
The new aging bond would add capacity for 14,000 more barrels of rum, bringing the total to 49,000. This, the company noted, would allow Mount Gay to increase its exports.
It currently sells about 400,000 cases per year to the US, which is its main market. However the executive said Mount Gay, which leverages the international marketing reach and reputation of Remy, also exports to Canada, Australia and European Union countries. The local company is also looking to penetrate additional markets. (EJ)