Industry

That’s the Spirit

Rum

A prominent employer, the Dominican rum industry distilled over 30 million liters in 2012. The total Caribbean rum market is estimated to export between $600 million and $1 billion annually, […]

A prominent employer, the Dominican rum industry distilled over 30 million liters in 2012. The total Caribbean rum market is estimated to export between $600 million and $1 billion annually, with the Dominican Republic exporting approximately $135 million annually. The Dominican rum market effectively denotes the Three-Bs: Barceló Export Import CxA (Beica), J. Armando Bermúdez & Co., and Brugal & Co, each a centenarian. Claiming 80% of the domestic market is Brugal, behind Puerto Rican brands Bacardi and Captain Morgan, being the world’s third largest rum producer, and the largest producer of traditionally made rum, at 75,000 liters per day. Its facilities also enhance Dominican tourism with their popular tours. Brugal produces two more expensive, less frequently consumed rums. True aficionados often opt for the Brugal Siglo de Oro, a 12-year-old rum launched in 1988 to celebrate the company’s centenary. White rum is the biggest seller domestically, accounting for 40% of Brugal’s production, while for Beica the figure is at 45%.

Beica is a significant contributor to exports to the EU and the US, and winner of the “World’s Best Rum” prize from the Chicago Beverage Tasting Institute, with a record 97 out of 100. Approximately 75% of production is exported, at 1.7 million cases annually. Beica sells considerably to the EU, with Spain sipping 900,000 cases a year. Exports aside, the domestic market in 2009, accounted for 100,000 cases of its finest; in 2012, the figure reached 400,000 cases, and medium-term forecasts are at 1 million cases. Beica has climbed from 22nd to 7th in the global market. To sustain the magic, annual production never exceeds 15 sets of 8,464 bottles each.

Dominican rum exports, first recorded to Spain in 1793, grew by 1,250% from $10 million in 2001 to $135 million in 2010 according to Access Dominican Republic. That year alone marked a 10% rise in exports according to the Dominican Association of Rum Producers. Trade agreements have fostered export sales. Comprising 15 Caribbean nations the Caribbean Forum (CARIFORUM) bridges the region with the EU. Both parties signed an Economic Partnership Agreement (EPA) in 2008 presenting CARIFORUM nations with tariff-free preferences in certain categories of heavy and lower-valued rums. The EU is a major export destination for the entire Caribbean region. In 2011, CARIFORUM states exported nearly $130 million worth of rum to the EU, with the Dominican Republic accounting for almost $81 million. Another major market for Dominican Republic exports is the US, registering over $40 million worth of rum exports in 2011. CARIFORUM has been perturbed by FTAs between the EU and third countries such as the territories of the US Virgin Islands and Puerto Rico. The US, as of 2013, was levying a $13.50 excise tax per gallon on all rum produced in the US, or imported, while third-party territories saw tax rebates, which CARIFORUM perceived as eroding the benefits of membership.

The rum industry is the fourth largest non-service sector earner of foreign exchange for the Caribbean after sugar, bauxite, and bananas, generating around $500 million according to the West Indies Rum and Spirits Producers’ Association (WIRSPA). Tasked with promoting best practices within the industry, in October 2013, WIRSPA revealed its Marque of Provenance in support of Authentic Caribbean Rum (ACR), exclusive to approved producers. An already well-established industry can look forward to increased sales as trends point to greater rum consumption, and as the Dominican middle class earns more disposable coin.

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