Dawgen Global: Rum parting the ways between US and the Caribbean - Business

Sunday, July 29, 2012

Rum parting the ways between US and the Caribbean - Business - JamaicaObserver.com

Rum parting the ways between US and the Caribbean - Business - JamaicaObserver.com: "THE rum industry in the non-US countries in the Caribbean is now under serious threat. At risk are the jobs of 15,000 workers directly employed in the industry and another 60,000 jobs that benefit from it.
Apart from employment, non-US Caribbean countries face the loss, annually, of US$700 million in foreign exchange and over US$250 million in tax revenues at a time they can ill afford it."

There is evidence that Barbados is already being adversely affected and the Dominican Republic, Guyana, Jamaica, and Trinidad and Tobago are under immediate threat.

As I pointed out in a commentary in May this year, the problem has not arisen out of direct action by the US Government. It has originated in Puerto Rico and the US Virgin Islands (USVI), both of which have been long-time rum producers in competition with other Caribbean manufacturers. Now, these two US affiliates are taking advantage of US Government refunds to them of excise taxes on rum to subsidise rum production and marketing for huge multinational companies. The vast increase in rum exports to the US mainland, at a subsidised cost, will squeeze out other Caribbean rums; and subsidised marketing will make it virtually impossible to compete.