Prime Minister: Government and CARICOM Tackling Rum Subsidies

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Prime Minister, Freundel Stuart and CEO of R??my Cointreau, Jean-Marie Laborde unveiling the plaque to open the new bond at Mount Gay Distilleries, Mount Gay, St. Lucy. (A. Miller/BGIS)

Barbados, other CARICOM states and 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 was reiterated by Prime Minister Freundel Stuart, as he addressed the opening ceremony and unveiled a commemorative plaque for Mount Gay Distilleries’ New Aging Bond in St. Lucy, yesterday.

Mr. Stuart 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.

And, he stressed that so serious was the matter that this country 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," he noted.

He stressed that CARICOM was not going to "relapse 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 resulted from these overwhelming, if I may use that word, subsidies being extended to producers in the US Virgin Island’s and Puerto Rico."

The Prime Minister 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".

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Prime Minister, Freundel Stuart examining one of Barbados??? finest with Master Brewer, Allan Smith at yesterday???s event at Mount Gay Distilleries. (A. Miller/BGIS)

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.

cathy.lashley@barbados.gov.bb

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