WTO ponders rum deal

Rum is the latest product to be dragged into the trade war between the USA and the EU, a war that has already embraced hormone-riddled beef, bananas and cashmere kilts. At the time of writing, Havana Club was at the World Trade Organisation in Geneva, fighting Bacardi for the right to use its own name.

You might think there is room for more than one rum brand in the world. That's what Pernod-Ricard thought when, in 1993, it joined forces with Havana Club to form Havana Club Holding (HCH). It has proved to be a lucrative partnership. Havana Club is one of the fastest-growing spirits in the world, even though its sales of one million cases may be tiny compared with Bacardi's 20 million.

Naturally, Havana Club's growth in Europe had nothing to do with Bacardi's rediscovery of its Cuban ancestry. Bacardi's promotional campaign is tryingto tap into the Buena Vista Social Club effect thathas made Cuba fashionable and is not trying tofool people into thinking Bacardi is a Cuban firm. It would be clever marketing if it were not for the legalmoves against Havana Club that have accompanied this shift.

Havana Club was created in Cuba in the last century by the Arechabala family, but by 1955 its trademark had been relinquished on international markets. After the Cuban revolution in 1959, the rum industry was nationalised and, as the Bacardi family had already done, the Arechabala family fled Cuba for the USA and, according to Pernod-Ricard, voluntarily relinquished the trademark on its arrival.

From 1966, the Cuban government began registering Havana Club as a trademark, including in the USA in 1976. In 1995 the US government agreed that the ownership of the trademark could be transferred to HCH. Then, in 1996, Bacardi began selling rum labelled "Havana Club" in the USA. HCH sued for fraud. Bacardi then conveniently discovered that a firm called Jose Arechabala International had sprung into existence in Liechtenstein in 1997 and was happy to sell Bacardi the rights to the Havana Club trademark, which it claimed it owned.

Just before the fraud case came to court, the US government withdrew its agreement that HCH owned the trademark and passed legislation which retroactively forbids the registration in the USA of trademarks that belonged to Cubans before they went into exile, even if those brands were relinquished voluntarily or had fallen into the public domain. The case was thrown out.

HCH argues that this violates international agreements on industrial property, hence the WTO hearing. You can see its point. Imagine if the reverse had happened and one of your ancestors had founded Coca-Cola but had fled the USA for Cuba…

Now educated people such as yourselves will already know the difference between Bacardi and Havana Club. Far be it from me to suggest a boycott of Bacardi, but surely your customers deserve what you judge to be the best. Having examined this purely in terms of quality and flavour, I would always choose Havana Club ahead of Bacardi. We'll have to wait and see what the WTO decides. n by Dave Broom