CARICOM tackling rum subsidies says PM Stuart
Barbados and other CARICOM rum producing states as well as the Dominican Republic are in the midst of high-level talks with officials of the United States government so that there will be a level playing field for rum producers.
This is the word from Prime Minister Freundel Stuart, as he addressed the opening ceremony for Mount Gay Distilleries‟ New Aging Bond in St. Lucy,
He noted that the discussions were necessary since, within recent time, subsidies had been given to rum producers in the United States Virgin Islands and Puerto Rico, much to the disadvantage of Caribbean rum producers, including Barbados.
He stressed that so serious was the matter that Barbados was prepared to take its case to the World Trade Organisation if a solution was not forthcoming.
“The Government of Barbados has had to take a stand on this issue, and under my instructions, the Ministry of Foreign Affairs and Foreign Trade communicated with the US Government on this issue. And, of course, very recent discussions have taken place between CARICOM countries, the Dominican Republic and the United States Trade Representative with a view to addressing the more pressing concerns of rum producers, not only here in Barbados, but in other parts of the Caribbean, and, of course, in the Dominican Republic,” the Prime Minister noted.
He pointed out that CARICOM was not going to “relax its vigilance” on the issue. “We are not about to relax our persistence on this issue... We do not intend to allow rum producers in the Caribbean to be so severely disadvantaged by this market distortion which has resultedfrom these overwhelming, if I may use that word, subsidies being extended to producers in the US Virgin Island‟s and Puerto Rico.”
Prime Minister Stuart assured rum producers in Barbados, and particularly those at Mount Gay, that Government “is alert to your concerns on this issue, and that CARICOM and the Dominican Republic are working collaboratively to ensure that we reach some kind of resolution on this matter”.
Lauding the impressive and substantial contribution which Mount Gay has made to the rum industry in Barbados throughout its history, Mr. Stuart noted that this could be attributed to its business acumen and commitment to excellence in business.
However, he cautioned that the future would not be smooth sailing because of the high local production costs which, he said, were likely “to present obstacles to the progress of Mount Gay” as well as the fact that some of its competitors were benefitting from special treatment through subsidies.
Mr. Stuart told his audience that rum “has steadily become a serious foreign exchange earner for Barbados, and you really cannot run a country like Barbados, a small open economy, unless you have reliable sources of foreign exchange. And, the rum industry has been making its own contribution to Barbados‟ gathering of foreign exchange needs to make life more tolerable and more abundant for the people of our island.
“So, we cannot afford to ignore threats to the industry. Threats to the industry are not for us a luxury, but we have to take these threats seriously and spring into action to protect the industry wherever these threats occur.”
He urged local rum producers to educate Barbadians about the importance of the product because it contributed a significant level of foreign exchange to the economy and had been around for three centuries.
The new aging bond, which stores rum for export, was built at a cost of approximately $3 million. Mount Gay Distilleries produces one of the world‟s oldest rums and came to Barbados in the 17th century.
Last month, the CARICOM Council for Trade and Economic Development (COTED) said the region continues to have “serious concerns” regarding the competitiveness of Caribbean rum in the United States.
"In addition to being the largest agriculture-based export industry in CARICOM, the rum industry is a substantial employer and a major contributor to foreign exchange earnings and government revenues," COTED said.
CARICOM Secretary General Irwin LaRocque said that the rum issue, involving Diageo, the global rum producer, continues to "threaten Caribbean rum into the US market, and the leaders agreed that strong and urgent political intervention was needed to address that issue.
"There is a concern with regards to some subsidy that is being provided for Diageo, the multilateral and one of the largest rum producers which is currently located in St Croix in the US Virgin Islands," said LaRocque.
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| Date Posted | January 21 2013 |