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Rum industry has reached tipping point

Chairman of the West Indies Rum and Spirits Producers Inc. (WIRSPA) Dr Frank Ward warns that the region’s rum industry has now reached the tipping point as a result of subsidised rum from the United States Virgin Islands and Puerto Rico flooding the markets.

Ward issued the caution last night during a Caribbean Rum Producers meeting at the Accra Beach Hotel and Spa, Rockley, Christ Church.

Describing the current trade practices as simply “unfair”, Ward noted that WIRSPA had been working with regional governments for the past two to three years to effect a solution.

Dr Frank Ward

Dr Frank Ward

“I think the time has come, given the fact that some of our companies are now beginning to struggle, certainly in Barbados, we cannot wait much longer and I am urging the governments to start making concrete steps to engage with the US administration to effect a solution that is fair and reasonable,” he said.

“We are supposed to be operating in an environment which promotes free and fair trade,” he added, pointing out that “subsidised product from wherever cannot be considered to be promoting free and fair trade.

“In our region we subscribe to the rule of democracy, the rule of law and property rights. We do almost everything that is expected of us as countries to participate effectively in the global system whether it is on the political or on an economic level.

“I therefore see no reason why we should not demand that the same consideration be given to us. It needs to be taken into account that we are small countries with very little policy space to manoeuvre,” Ward added.

While insisting that action needed to be taken in a very short space of time, he said some rum companies were already cutting back on production as a result of the market conditions.

“That does not bode well for the company or the wider economy. You must remember that rum is by and large export driven. It is a significant earner of foreign exchange. If you cut back on production, you cut back on exports, then you will cut back on the availability of foreign excahnge.

Based on figures I have seen exports of rum from Barbados decline because we cannot compete with what is happening in the world,” Ward said.

The rum chairman also cautioned that one of the biggest challenges facing the Barbados rum industry was the cost of raw materials, such as molasses, which now had to be imported because of a decline in the acreage under sugar.

“Barbados imports most of the molasses that we use and we do so at a cost. We buy on the world market and we have to pay in foreign currency. The price of molasses has quadrupled over the years and then quality has declined,” noted Ward, adding “you cannot make rum without sugar cane juice or molasses”. 

6 Responses to Rum industry has reached tipping point

  1. Carl Harper December 12, 2014 at 4:31 am

    Donville Inniss, Minister of International Business, is the one who must lead the charge to engage in dialog with US officials to bring a resolution to this nagging problem that is threatening the livelihood of Barbadians.

    Inniss was most eager to cooperate with the Americans on signing FATCA for reciprocal reporting on each other’s citizens with foreign accounts in excess of US$50,000 for tax purposes.

    Get back to work, Mr Inniss, stop all the talking and do not go home until you bring this rum export matter to a head.

  2. Rawle Spooner
    Rawle Spooner December 12, 2014 at 6:56 am

    For heaven sake do not understand why this matter was not taken to World Trade Organisation WTO from the begining not that if USA loses they will comply just look at Antigua who went there won but still waiting for setttlement.This is a David vs Goliath battle plain and simple.

  3. seagul December 12, 2014 at 8:26 am

    We are small countries with almost no space so how can we negotiate consideration with such a strong word as to demand? In a capitalist world everyone under democracy exist through competition, and we must accept this. The time is up for the rum plantocracy. We have the perfect climate in Barbados to harvest the Aloe vera–the basis of most skin creams and medicine.
    No race can prosper till it learns that there is as much dignity in plowing a field as in writing a poem–these are positive messages to be engrained in the young….Deeper soul.

  4. Kelly Cates-Thornton
    Kelly Cates-Thornton December 12, 2014 at 9:08 am

    This must be corrected!

  5. Patrick Blackman December 12, 2014 at 9:53 am

    How can we negotiate as a group when we cannot even get along as a group.

  6. Steven Layne
    Steven Layne December 12, 2014 at 11:38 am

    What it mean for you where ever I go in b.dos rum consumption still high what this mean for plantation owner plant weed or sell one of the most shameful practice I see asking for hand out for 50yrs old estate


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