Obama opens Cuba door wider

Pernod Ricard has come another step closer to getting back into the US market with its Havana Club rum range.

In a little-reported announcement last week, President Obama lifted the ban on US visitors to Cuba returning home with as much Cuba-made rum and cigars as they wish for their own consumption. Previously there were strict volume limits as part of the 60-year trade ban Washington placed on Cuban products.

Back in the mid 1990s, Pernod Ricard formed a joint venture with the Cuban government’s rum company to distribute and market Havana Club, a brand that pre-Castro, had been made by the Arechabala family in Havana.

On the communist takeover of Cuba, the Arechabala family fled the island and the Castro regime nationalised rum production.

The Arechabalas set up production in Puerto Rico and eventually sold out to Bacardi, which argued – and won – in US courts that it was entitled to the Havana Club brand name in the US because it had bought both the brand and the recipe from legitimate owners who had never been compensated for the expropriation.

For its part, Pernod Ricard has argued over the past 20 years that its joint venture with the Cuban government is the only legitimate owner of the Havana Club name, especially as the rum is produced in Cuba and is backed by the marketing slogan “El Ron de Cuba”.

Earlier this year the French group won a ruling that it was entitled to trade mark protection for Havana Club in the US and subsequently Obama announced that the trade war with Cuba would end and diplomatic relations between the two countries would be restored. America now has its first ambassador to Cuba since 1952 and American’s can now travel there much more freely.

The trade mark battle is continuing, however. A Bacardi representative asserts that the Bacardi product is the “authentic” one and that the company “maintains rightful ownership” of the brand. Pernod counters that claim, saying, “the only genuine” Havana Club “comes from Cuba.”

But with potential sales of an extra 4m cases a year to the US market, Pernod RIcard is eager for Americans to sample its Cuban product, something they have been able to do previously only by travelling abroad.

Pernod Ricard and its Cuban partner say they are ready to move back into the US with Havana Club as soon as the embargo is finally lifted. Production has been stepped up in readiness.

And last week Obama opened the door a little wider.

Since this article was published Pernod Ricard has contacted db to point out that the Arechebala family did not set up production in Puerto Rico when they left Cuba, but stopped their rum-making activities altogether. Pernod Ricard also notes that the Arechebalas let their trademark rights lapse in 1973, meaning that the Havana Club brand name became free of rights. Indeed, according to Pernod Ricard, the family never paid the US$25 fee to renew their trademark, letting their rights to the brand expire. Furthermore, Pernod Ricard asserts, it was not until 1993, precisely the year the joint-venture between CubaExport and Pernod Ricard was created, that the Arechebalas and Bacardi started to show some interest in the brand.