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    Categories: Legal News

Caribbean Makers of Rum Being Beaten by U.S. Subsidies

Producers of rum in countries such as Guyana, Antigua and Jamaica are claiming they are taking unfair hits from trade and marketing advantages given to beverage corporations that operate globally and in U.S. territories. The countries also claim that rum subsidies in the U.S. might push some popular Caribbean rums labels out of business.

“The amounts that are being doled out now are staggering,” said Frank Ward, chairman of the West Indies Rum & Spirits Producers’ Association. “We were able to live with the level of U.S. subsidies as they once were. But the massive increases, we believe, have skewed the market.”

Caribbean countries use rum to generate $500 million in foreign exchange and over $250 million in tax revenue. When liquor is sold in the United States, the subsidies come from the money raised through tax placed on that liquor. Almost 100 percent of the money made by the sale of the rum is deposited into treasuries for the U.S. Virgin Islands and Puerto Rico.

“Our Caribbean distilleries need to export rum in order to survive. But bigger subsidies in the U.S. islands means we don’t get a level playing field for our exports, and it’s going to affect both small and large producers here,” said Anthony Bento, managing director of the Antigua company that makes English Harbour Rum.

As of now, there have not been any governments from the Caribbean willing to challenge the United States on its subsidies. If a government wants to challenge the United States it would have to do so with a WTO complaint.

Jim Vassallo: Jim is a freelance writer based out of the suburbs of Philadelphia in New Jersey. Jim earned his Bachelor of Arts degree in Communications and minor in Journalism from Rowan University in 2008. While in school he was the Assistant Sports Director at WGLS for two years and the Sports Director for one year. He also covered the football, baseball, softball and both basketball teams for the school newspaper 'The Whit.' Jim lives in New Jersey with his wife Nicole, son Tony and dog Phoebe.

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