HAVANA, Cuba – Despite U.S. efforts to limit trade, Cuba's state-run company is continuing to make deals with major alcoholic beverages market players in U.S.-allied countries to sell its premium brands of rum.
While Pernord Ricard, a French multinational company, still has exclusive international rights to market Havana Club, British multinational Diageo announced Monday that its subsidiary is going into the Ron Santiago SA joint venture with the Cuban government.
"Consumers are looking for new and authentic experiences and working with Corporación Cuba Ron provides a great opportunity to expand our portfolio," said Dayala Nayager, Diageo's managing director in Ireland and France.
Diageo's new deal will allow the multinational to exclusively market Santiago de Cuba Rum around the world, but like Cuba's Havana Club, the Santiago de Cuba Rum brand will not be distributed in the United States.
"More than just a rum, Santiago de Cuba was born in the city where the history and tradition of Cuban light rum originated," said Juan Gonzalez, Corporación Cuba Ron's president. "It is an expression of its people and part of our Cuban tradition and culture."
The Bacardi family started their rum business in 1862 in Santiago de Cuba and the Arechabala family created Havana Club in 1934. Decades after Fidel Castro's government confiscated their assets, Pernord Ricard and Corporación Cuba Ron co-founded Havana Club International in 1993.
"Cuba’s revolutionaries confiscated and nationalised many family businesses. They imprisoned those who resisted, and tortured those who opposed them. But they did not know how to produce or distribute rum," a Bacardi spokesperson wrote in a statement last year, adding that Pernord Ricard had helped the Cuban military to generate "millions of dollars by selling an imposter rum poured into a bottle and marketed under a stolen name."
The Arechabala family gave the Bacardi family the Havana Club recipe in 1994. For decades, Bacardi has been snarled in complicated litigation in the U.S. with Pernord Ricard for the use of the Havana Club trademark.
Bacardi's Havana Club, which is made in Puerto Rico, is only sold in the U.S., as U.S. courts have consistently ruled Havana Cluba International doesn't have the rights to the trademark. Democrats and Republicans made that possible.
President John F. Kennedy imposed the embargo in 1962 and presidents George H.W. Bush and Bill Clinton signed laws in 1992 and 1996 to strengthen it. President George W. Bush and President Donald Trump have both increased enforcement.
Despite the political climate, Cuba's rum market is set to grow over the coming five years, according to Orbis Research. Corporación Cuba Ron launched the Santiago de Cuba Rum Extra Añejo Oscuro in 2012. The brand also carries Carta Blanca, Añejo and Añejo Superior.
The revenue in the worldwide rum segment is projected to amount to about $16 million this year, and the U.S represents $2.68 million. In 2012, Pernord Ricard announced the registration of the Havanista trademark, which they planed on using when the U.S. embargo was lifted.
Earlier this year, Trump opened up a window allowing U.S. citizens to file lawsuits against Cuban companies that traffic in confiscated assets. The production of rum is linked to the growing of sugarcane since molasses is a byproduct of the production of sugar.
Diageo's tone on Monday was less defiant than that of Pernord Ricard. Luca Cesarano, the general director of Ron Santiago, said the Diageo companies that do business in the U.S. will not be doing business with Cuba.
"Diago is well aware of the application in these rules with the United States and is taking all steps required to ensure that all regulations will be respected," Cesarano said.