Pernod Ricard has launched a major expansion of the legendary Havana Club distillery, warehouses and bottling lines, in a joint venture with the Cuban government.
The move comes as the company expects the embargo on trade in the US market to be lifted, according to The Wall Street Journal. However, the move is most likely to inflame tensions with Bacardi Ltd. over ownership of the Havana Club name.
While Pernod asserts that a deal with the Cuban government from 1993 gives it rights the name worldwide, Bacardi believes it owns rights to the brand. The Bacardi family says that it bought the brand name from Havana Club’s founders, the Arechabala family who likewise fled Cuba after Fidel Castro’s government nationalised the island’s distilleries in 1960.
Both brands will be fighting for a chunk of the lucrative North American rum market, which accounts for approximately 40 per cent of all international rum sales.
The battle over the brand name has also been made more complicated by a US trademark decision earlier this year. Back in January, the US Patent and Trademark Office awarded a trademark for Havana Club rum to the Cuban government, in so doing it reversed a policy of denying the government rights to the brand in the US.
At the time of the decision, Bacardi executive vice president of external affairs Rick Wilson told The Wall Street Journal that the company would “take every means available to fight [the decision]”.
Pernod spokesman Olivier Cavil told The Wall Street Journal: “At the end of the day, if the embargo is lifted, the final judge will be the American consumer. What does he prefer: a Havana Club brand produced in Cuban tradition with pure Cuban sugar cane or a me-too rum produced in Puerto Rico?”
As it stands the argument may be a theoretical one, as the embargo can only be lifted by an act of Congress. If that occurs, Bacardi apparently intends to capitalise on the message that “rum is made in other interesting places that can play to origin as well”.