Region urged to fight for rum industry

Ivan Ogando Lora

THE rum industry in Barbados and other producing states is serious business for this region. To this end, impediments holding up the further growth of the CARIFORUM rum industry must be removed.

Ivan Oganda Lora, Director General of CARIFORUM, put the issue in perspective when he discussed the recently launched programme which the European Union is undertaking with the West Indies Rum and Spirits Producers Association (WIRSPA).  

Lora said Caribbean countries must ensure the survival of the industry. The EU is providing just over Bds$19 million for a programme to further promote Caribbean rum. The CARIFORUM Director General highlighted the project, but also discussed many of the challenges which the commodity has encountered over the years.

According to him, rum has been a critical part of the socio-economic and cultural fabric of the Caribbean for three centuries.

“Rum provides significant economic value to Caribbean countries thereby constituting a key export sector which brings about US$400 million in foreign exchange and excise duties annually.

“It also generates direct and indirect employment for over 12 000 people across the region and has important linkages with other productive sectors in the economy in the areas of goods and services,” he said.

Said the Director General: “All CARIFORUM countries produce rum and for most of them the beverage is the leading export commodity. However, the maturation of the rum industry in the region did not take place overnight.”

Lora maintained that throughout the years, Caribbean rum has faced and continues to face many challenges to guarantee and to preserve the economic value of the industry. This has required great efforts and sacrifices in addition to the strong alliances with governments and the private sector to provide the necessary support for structural changes in the industry and in order to adapt to contemporary international competition.

He recalled that since the First Lomé Convention (in 1975), rum was one of the four commodities which enjoyed trade with Europe under a Protocol. According to him, this Protocol provided duty-free access along with some trade development measures.

He noted that some people had found fault with the terms of the Rum Protocol in relation to the development of the regional industry.

“The truth of the matter is that the Protocol benefited the regional rum industry to the extent that exports were made to Europe,” he noted.

Lora remarked that shortly after the EU removed the quota for rum in 1996, the region’s rum industry faced one of its biggest challenges; one of them being the preference erosion for rum in the European market. Not only that, he said, but the removal of the quota was done without negotiation between Europe and the Caribbean.

However, recognising the potential damage to the industry, the EU changed its stance in 1999. Under its Eighth EU Development Fund, Europe provided $70 million for an integrated programme for the industry. The programme ended in 2010. (JB)