havana club v bacardi

[Ken Gargett]

interesting stuff.

As US-Cuba relations thaw, fight for the soul of Cuban rum could begin anew

A decades-long legal tussle left Havana Club with dual identities – one in the US market and one abroad. But after Wednesday’s historic announcement, the uneasy truce between its two parent companies might be in jeopardy

Havana Club rum has been produced by Pernot Ricard in Cuba and Bacardi in Puerto Rico for nearly two decades. Photograph: Alicia Canter

Nicky Woolf in New York

Sunday 21 December 2014 00.00 AEST

In Graham Greene’s Our Man in Havana, the Havana Club is the home of the iconic Cuban rum of the same name; a small bar on the second floor, with the windows facing the cathedral where the body of Christopher Columbus had once lain.

It is here that Greene’s anti-hero Wormold drinks and plays chess with his contact, the chief of police. “They had met at the Havana Club,” Greene wrote. “At the Havana Club, which was not a club at all and was owned by Bacardi’s rival, all rum-drinks were free.”

The novel was published the year before the revolution that swept the Castro regime to power, and two years before the US imposed an embargo on Cuba that has meant not a drop of Cuban Havana Club has legally arrived on American soil for 50 years.

But the passage is oddly foreshadowing. In America, if you were to order Havana Club today, you would find yourself drinking a spirit distilled not in Cuba but inPuerto Rico – and by Bacardi, the rival to which Greene referred.

In fact, for the past 20 years, the iconic Cuban rum has been at the centre of an intense corporate drama – a tussle which has drawn in not just the Castro regime, but the US Congress, the World Trade Organisation and the European Union too. There is currently a lull in that conflict, but now, thanks to the thawing of tensions between the two countries announced by their respective presidents this week, it may be about to re-ignite.

Since the beginning of the US embargo, it has been illegal to import Cuban rum into the US. But you can still drink Havana Club, made in the same way as the stuff Wormold drank and branded in almost the same way. Since 2006 it has been made in Puerto Rico and shipped to the American mainland, while the rest of the world buys identically made and practically identically labelled rum from Cuba.

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This is an uneasy truce, a state of legal cold war that has been reached after a vicious legal tussle over nearly two decades between two alcohol giants, one French and allied with the Cuban government – Pernod Ricard – the other based in the US.

The story begins with Jose Arechabala, a Spanish émigré who founded the Havana Club distillery in Cardenas, Cuba, in 1934. After the revolution in 1959, his company was nationalised by the Castro regime, and a member of the Arechabala family was imprisoned. The rest, including Jose, fled to Spain.

In Cuba, the nationalised company continued to produce Havana Club rum. In the early 1990s, it entered a partnership with another giant of the spirits world, the $9bn behemoth French alcohol conglomerate Pernod Ricard (owners of Absolut vodka, Glenlivet whisky and a number of other popular brands). They went 50/50 on the rum distillery with the Cuban government’s national export company, Cubaexport, in 1994, and started snapping up world trademarks at an aggressive pace (they now hold the trademark in over 120 countries).

In 1973, the Arechabala family let their claim to the US trademark lapse. But in 1994, they entered into an alliance with Bacardi – another Cuban company that fled after the revolution which has grown into a $5bn corporation that, in addition to its namesake rum and its spin-offs, owns Grey Goose vodka, Bombay Sapphire gin and Martini vermouth, among many other brands – to license the recipe for the rum in the US.

Because of the embargo, Pernod could not sell the rum – which it was making in Cuba – in the US. Bacardi wanted to get in on the action.

At first the US Patent and Trademark Office allowed Pernod to apply for the US trademark for the rum. But Bacardi had its eyes on it, and in 1995 it began producing a test run of its own rum under the Havana Club label in the Bahamas.

Pernod Ricard sued, kicking off a fierce legal battle which quickly escalated into the realm of politics and diplomacy. In 1997 the Arechabala family sold the recipe and its claim to the brand to Bacardi. In 1998, before the courts had a chance to rule on the trademark question – and after vigorous lobbying by Bacardi – the US Congress slipped a little bit of language on the subject into a much broader appropriations bill.

This legislative end-around, which quickly became known as the “Bacardi bill”, made it illegal for the part-Cuban-owned company to renew its US trademark once it expired by preventing the recognition of any rights for trademarks confiscated by a government without compensation.

Things got nasty. “The United States must prevent the Bacardi company from stealing the Havana Club rum brand name. Its government should not be interested – and I want to state this clearly here – in a conflict of trademarks and patents with Cuba,” Cuba’s minister of foreign affairs said in a speech to the UN general assembly in 2003.

Despite the embargo, Cuba and the US had until that point largely respected each others’ trademark rights. Coca-Cola is trademarked in Cuba, so while the embargo banned it from being shipped, it is protected from copycat companies should the embargo be lifted.

Astonished by the Bacardi bill, Pernod Ricard complained to the European Union, which complained to the World Trade Organisation, which – reluctantly, and eventually – ruled that the US had the power to make its own rules on the application of trademarks.

Still, until 2006 Pernod Ricard and CubaExports held the US trademark, though it didn’t do them much good, as they couldn’t export a single bottle to the US because of the embargo. But in 2006, when the trademark ran out, the Bacardi bill prevented them from renewing it. As soon as the trademark ran out, Bacardi started manufacturing Havana Club rum in Puerto Rico for the US market. Eight days later, Pernod Ricard sued them again.

The battle finally settled to an uneasy truce in 2012, when the US supreme court declined to hear Pernod Ricard’s last appeal. After a 17-year battle, Bacardi had snatched the US trademark.

Now, Pernod Ricard has registered an alternative name for its Cuban-brewed Havana Club: “Havanista”, which Olivier Cavil, a spokesperson for Pernod Ricard, told the Guardian was ready to start shipping in “thousands of crates” into the US whenever – if ever – the embargo is lifted by Congress.

The executive measures announced by Obama on Wednesday stated that licensed US travellers would be “authorized to import $400 worth of goods from Cuba, of which no more than $100 can consist of tobacco products and alcohol combined”, and that the administration aims to “empower the nascent Cuban private sector”.

“They will become our first ambassadors,” said Cavil, “because they will bring back the national symbol of Cuban rum, which is of course Havana Club” – which of course is the Pernod Ricard rum, distilled in Cuba.

At the moment, in public at least, both sides are treading very carefully. Bacardi gave a wary statement to the Guardian which said: “Bacardi is proud of its Cuban roots. We have the utmost respect and sympathy for the Cuban people with whom we share a common heritage.”

“Regarding the diplomatic actions today, we will need to wait and see what the impacts are,” it continued.

Unofficially – though for the moment it has no legal avenues left to pursue – Pernod Ricard and CubaExport still dispute Bacardi’s claim to the US trademark.

But if the embargo is lifted, the cold war over rum may turn hot once more.

[leftimatic]

Santiago or Legendario man myself. Ambers only. Never much cared for the Havana Club. But none the less should be interesting to see how all this stuff plays out.

[...]

Cool read, thanks for sharing Ken!

[RockemSockem]

I wish we had better access to more Cuban rum here in Ontario (Canada). The provincially run Liquor Control Board of Ontario (LCBO) now is down to only 2 different Cuban options:

Havana Club Anejo Reserva Rum

LCBO# 443903 | 750 mL bottle

Havana Club Anejo Reserva Rum

$28.95

Havana Club Dry 7 Years Old Rum

LCBO# 53140 | 750 mL bottle

Havana Club Dry 7 Years Old Rum

$32.95

I usually will go for the 7 year (worth the extra $4) but if we had Santiago or Legendario here I'd love to change it up with those too!

Anyone know how we can petition LCOB to carry these?

/Dave

[CUBANO]

I love the Seleccion de Maestros, but Legendario is very good too.

[CanuckSARTech]

  On 12/31/2014 at 2:32 AM, RockemSockem said:

I wish we had better access to more Cuban rum here in Ontario (Canada). The provincially run Liquor Control Board of Ontario (LCBO) now is down to only 2 different Cuban options:

Havana Club Anejo Reserva Rum

LCBO# 443903 | 750 mL bottle

Havana Club Anejo Reserva Rum

$28.95

Havana Club Dry 7 Years Old Rum

LCBO# 53140 | 750 mL bottle

Havana Club Dry 7 Years Old Rum

$32.95

I usually will go for the 7 year (worth the extra $4) but if we had Santiago or Legendario here I'd love to change it up with those too!

Anyone know how we can petition LCOB to carry these?

/Dave

Negative. You can get the white, gold, anejo, and anejo 7 anos. As well, you used to be able (as recently as about 6 months ago) to order the Maximo, but it was by a 6-bottle case only, IIRC.

Also, I've heard some state that recently you can get the HC Seleccion de Maestros here now.

[CanuckSARTech]

Ken, thanks for sharing that story.

A couple things though....

I didn't know you could even order "Havana Club" rum in the U.S. at all. Not in the same bottles and such that we all get it in. Never seen it, never heard of it, never seen it available in any liquor order books around the Great Lakes region. I (ahem) might have brought over some bottles for friends as gifts, due to it's unavailability there.

Also, in Canada, the stuff we get is from Pernod.

I remember some of that stuff in the early 2000's about Pernod and Bacardi. I remember that Bacardi had to change their labels away from the "Made in Cuba since 18--" (which they haven't done, Canadian or American sold, since the revolution), to the current "Casa fundada en Cuba" type label.

[laficion]

Thank you Ken for writing this and sharing It. As for my opinon,I would take any Cuban rum, (Santiago ,Varadero, Havana Club, etc.)

or ANY other Cuban Rum before ANY Bacardi rum because of the taste.

Guy

[headstand]

  On 12/31/2014 at 12:52 PM, laficion said:

Thank you Ken for writing this and sharing It. As for my opinon,I would take any Cuban rum, (Santiago ,Varadero, Havana Club, etc.)

or ANY other Cuban Rum before ANY Bacardi rum because of the taste.

Guy

I'm with Guy on this.

By the way, this thread is killing me. I have seriously curtailed my rum consumption since late November in order to shed some pounds. I feel my resolve waning...

[gr8eman]

  On 12/31/2014 at 8:34 AM, CanuckSARTech said:

Ken, thanks for sharing that story.

A couple things though....

I didn't know you could even order "Havana Club" rum in the U.S. at all. Not in the same bottles and such that we all get it in. Never seen it, never heard of it, never seen it available in any liquor order books around the Great Lakes region. I (ahem) might have brought over some bottles for friends as gifts, due to it's unavailability there.

Also, in Canada, the stuff we get is from Pernod.

I remember some of that stuff in the early 2000's about Pernod and Bacardi. I remember that Bacardi had to change their labels away from the "Made in Cuba since 18--" (which they haven't done, Canadian or American sold, since the revolution), to the current "Casa fundada en Cuba" type label.

Never seen it either. That said, I've had Havana Club and no way is it or Bacardi better than Barbados rum esp. with cigars.

My interest is the effect of lifting the embargo on the price and quality of cigars. If the demand for Cubans spikes, will the quality go down and the price go up? Ken and Rob duly note the issues regarding cigar production, and that is one of the reasons the video reviews are interesting to me (believe it or not). maybe we can get some analysis on this topic in the next review?

[Ken Gargett]

  On 12/31/2014 at 12:52 PM, laficion said:

Thank you Ken for writing this and sharing It. As for my opinon,I would take any Cuban rum, (Santiago ,Varadero, Havana Club, etc.)

or ANY other Cuban Rum before ANY Bacardi rum because of the taste.

Guy

i would stand up for bacardi 8. that is usually a very decent rum.

to our sealbasher brethren, i'm merely the messenger here. no idea what is actually on sale in the USA. i would assume you guys would have the real thing.

as for havana club, we have finally starting seeing the 15 year old here. it is a cracker. like the seleccion and 7 years. but the 15 its happily with the very best in cuba and outside.

[Ryan]

If I was a distillery worker in Puerto Rico, I'd be worried.

If and when the embargo falls, Bacardi will be back in Cuba in a shot, or they should be.

Refined run originated in Cuba, as did the mojito, Daiquiri and the Cuba Libre. Also, Bacardi have been promoting their Cuban heritage for years.

Bacardi bottles say, I think, founded in Santiago de Cuba 1830.

Most Bacardi drinkers worldwide probably don't know or care where it's currently made. With a Cuban produced Bacardi there's a whole other market for it, in premium rums.

Also, if I was Bacardi, I'd spend whatever it cost to get the old Havana headquarters building back. It would pay for itself through marketing and brand awareness fairly quickly.

[anacostiakat]

No Havana Club in states unless gifted by someone.

Not a big Bacardi fan but honestly can not remember having the Bacardi 8.

There are many good rums available here though. Clement, Appletons, Barbancourt, etc.

[Sophistic]

bacardi 8>>>>hc 7

[LGC]

Many regard Cuban rum as the best in the world. If HC and the other cuban brands originated from different countries, would they be regarded in the same light? The history is interesting, but I taste only with my taste buds... not with my senses... or my wallet. It's difficult to be happy with something, when you think you might be missing out on something better out there. That goes for rum, cigars, and other things. I've had only a handful of cuban rums; and the Matusalem(old, don't remember the exact age) was the best. Would I be able to identify it as the superior rum, without the bottle and label? Probably not. It would be interesting to see how all the cuban rums would stack up in a blind taste test. I don't think the same factors apply to rum as in cigars, when deciding on a more favorable product. I once saw a program on TV where vodka snobs could not identify there favorite distillers out of the line up. Some even favored the cheaper brands.

[Ken Gargett]

  On 1/1/2015 at 2:30 PM, Ryan said:

If I was a distillery worker in Puerto Rico, I'd be worried.

If and when the embargo falls, Bacardi will be back in Cuba in a shot, or they should be.

Refined run originated in Cuba, as did the mojito, Daiquiri and the Cuba Libre. Also, Bacardi have been promoting their Cuban heritage for years.

Bacardi bottles say, I think, founded in Santiago de Cuba 1830.

Most Bacardi drinkers worldwide probably don't know or care where it's currently made. With a Cuban produced Bacardi there's a whole other market for it, in premium rums.

Also, if I was Bacardi, I'd spend whatever it cost to get the old Havana headquarters building back. It would pay for itself through marketing and brand awareness fairly quickly.

it may not be nearly as easy as it might seem. they are totally on the nose in cuba, because of the past actions. can't see them being welcomed back. money may change things but there is considerable antagonism towards them.

[RockemSockem]

  On 12/31/2014 at 8:28 AM, CanuckSARTech said:

Negative. You can get the white, gold, anejo, and anejo 7 anos. As well, you used to be able (as recently as about 6 months ago) to order the Maximo, but it was by a 6-bottle case only, IIRC.

Also, I've heard some state that recently you can get the HC Seleccion de Maestros here now.

AH yes! Must be a issue with the LCBO database. I did a search for 'rum' and filtered by country (Cuba) and only get 3 bottles, one marked discontinued. BUT, if i search 'anejo' then filter by country I see the others.

[Ryan]

  On 1/1/2015 at 7:45 PM, Ken Gargett said:

it may not be nearly as easy as it might seem. they are totally on the nose in cuba, because of the past actions. can't see them being welcomed back. money may change things but there is considerable antagonism towards them.

It probably wouldn't be easy but Bacardi is the most lucrative and widely known brand ever to come out of Cuba with yearly sales of about $5 billion compared to Habanos sales of about $300 million, for example. It would make perfect sense for them to move at least some production back. The Cubans would sit up and listen to those numbers. Any old animosities could be overcome. The Padrons and Fuentes would grow tobacco in Cuba again if they could.

[Ken Gargett]

  On 1/1/2015 at 11:25 PM, Ryan said:

It probably wouldn't be easy but Bacardi is the most lucrative and widely known brand ever to come out of Cuba with yearly sales of about $5 billion compared to Habanos sales of about $300 million, for example. It would make perfect sense for them to move at least some production back. The Cubans would sit up and listen to those numbers. Any old animosities could be overcome. The Padrons and Fuentes would grow tobacco in Cuba again if they could.

the money might assist it to happen but there is real hatred and bacardi often considered by the cuban govt to be involved in plots against castro and also the bacardi family allegedly involved in attempting to overthrow the cuban govt. no doubt many sides to the truth and we'll perhaps never know the full story.

whilst there, i've been told several times never ever to mention the name bacardi in public.

if they can get back in then i really will believe things have changed.

[OZCUBAN]

Great post Ken very interesting not a easy fix by any means I think watch this space would be apt

For the record the only rum I realy drink on a regular basis is Zacappa

Cheers

[Ken Gargett]

  On 1/2/2015 at 12:38 AM, OzCuban said:

Great post Ken very interesting not a easy fix by any means I think watch this space would be apt

For the record the only rum I realy drink on a regular basis is Zacappa

Cheers

can't go wrong with zacapa!

[CanuckSARTech]

  On 1/1/2015 at 11:37 PM, Ken Gargett said:

the money might assist it to happen but there is real hatred and bacardi often considered by the cuban govt to be involved in plots against castro and also the bacardi family allegedly involved in attempting to overthrow the cuban govt. no doubt many sides to the truth and we'll perhaps never know the full story.

whilst there, i've been told several times never ever to mention the name bacardi in public.

if they can get back in then i really will believe things have changed.

And yet the Cuban tourism agencies tout about the Bacardi heritage, the state owns the Bacardi Museum, makes a healthy profit off of tours of there, etc.

Such is the Cuban way.

[Ken Gargett]

  On 1/2/2015 at 7:26 AM, CanuckSARTech said:

And yet the Cuban tourism agencies tout about the Bacardi heritage, the state owns the Bacardi Museum, makes a healthy profit off of tours of there, etc.

Such is the Cuban way.

ah yes, but they remind you regularly of the betrayal, of course.

never straighforward in havana.

[Tino]

It's written from the Bacardi's perspective, but there's an interesting book on Bacardi and Cuba:

http://books.google.co.uk/books/about/Bacardi_and_the_Long_Fight_for_Cuba.html?id=EeTwCWqOmcUC&redir_esc=y

[Ken Gargett]

  On 1/2/2015 at 12:18 PM, Tino said:

It's written from the Bacardi's perspective, but there's an interesting book on Bacardi and Cuba:

http://books.google.co.uk/books/about/Bacardi_and_the_Long_Fight_for_Cuba.html?id=EeTwCWqOmcUC&redir_esc=y

yes, definitely worth a look.

and for one from the other side, ospina's book. read this and you can't imagine bacardi ever being allowed back - but it is very much biased towards thee havana club/cuban perspective.

Bacardi: The Hidden War Paperback – 20 Jul 2002

by Hernando Calvo Ospina (Author)

1 customer review

See all 2 formats and editions

• Hardcover

  £43.92

  8 Used from £18.3811 New from £30.90
• Paperback

  £14.99

  13 Used from £7.987 New from £12.33

The Bacardí rum company is one of the most successful and recognisable brands in the world. It spends millions on marketing itself as the spirit of youth and vitality. But behind its image as a party drink lies a very different story.

In this book, investigative journalist Hernando Calvo Ospina brings to light the commercial and political activities of the Bacardí empire to reveal its role in fostering the 40-year long confrontation between the United States and the revolutionary government of Cuba. Through meticulous research, Ospina reveals how directors and shareholders of the family-owned firm have aggressively worked to undermine the Castro government. He explores how they have been implicated in supporting paramilitary organisations that have carried out terrorist attacks, and reveals their links to the extreme right-wing Cuban-American Foundation that supported Ronald Reagan's Contra war in Nicaragua.

Bacardí: The Hidden War explains the company's hand in promoting 'special interest' legislation against its competitor, Havana Club Rum, which is manufactured in Cuba and promoted by the European company Pernod-Ricard. Ospina reveals the implications of Bacardí's involvement in this growing dispute that threatens to create a trade war between America and Europe. Exploring the Bacardí empire's links to the CIA, as well as its inside links with the Bush administration, this fascinating account shows how multinational companies act for political as well as economic interests.