More Booze Battles: Havana Club

Havana Club, the state-owned Cuban rum brand that made an international distribution deal with liquor giant Pernod Ricard in 1993, is sold in every major market in the world—except for the U.S. Blame the trade embargo against Cuba. I’ve had the pleasure of sampling Havana Club: the Añejo Reserva, the Añejo 3 Años, and the delicious dark Añejo 7 Años. If you’re accustomed to Bacardi, the best-selling rum in the world (with a 35% worldwide market share), any of Havana Club’s offerings will be a revelation. Who knew the Cuban-style white rum could be this flavorful?

But there’s another Havana Club. This one, sold primarily (and perhaps only) in Florida, is produced by Bacardi. How can two huge liquor companies both sell under the same brand? That’s the subject of a legal battle between Pernod Ricard, which distributes Havana Club (and owns Absolut and Beefeater, among others), and Bacardi, which in addition to Bacardi rum, owns Bombay Sapphire and Grey Goose, among others.

Bacardi won the latest round. Here’s the story in a nutshell: Bacardi may have lost $76 million in assets when Fidel Castro seized its Cuban operations in 1960, but the company was fortunate enough to have had distilleries in Puerto Rico since the 1930s. In fact, Bacardi, which was founded in 1862, was a multi-national company by 1910. This enabled Bacardi to keep going outside of Cuba, despite Castro’s takeover. Havana Club, a brand that traces its heritage back to 1878, wasn’t so fortunate. The founding Arechabala family lost it to Castro and fled to Spain. Havana Club continued making its rum under state ownership, and after the trademark expired in 1973, the Cuban government renewed it in the U.S. in 1976. Fast-forward to the 90s: Bacardi pays the Arechabala family an estimated $1.25 million for whatever remaining legal stake they may have had in the Havana Club name (apparently they had turned down offers from Pernod Ricard). This is when Bacardi started selling its “Havana Club” rum in Florida. Pernod sued, and later convinced the European Union to file a complaint with the WTO.

Bacardi, which has allegedly funded attempts to assassinate Castro in the past, claimed the whole thing was not political. Castro responded by threatening to market its own soda under the Coca-Cola brand and similarly ignore other U.S. trademarks.

The U.S. Treasury refused to let Pernod Ricard renew the U.S. trademark in 2006 and this week, a U.S. Appeals Court ruled that the trademark that is recognized by countries outside of the U.S. isn’t valid here. There’s also another lawsuit filed by Pernod Ricard against Bacardi, one that accuses Bacardi of deceptive advertising (implying that Havana Club is Cuban when it isn’t).

The Nation published an excerpt of a book by Ian Williams called Rum: A Social and Sociable History of the Real Spirit of 1776 in 2005 that explains a lot of these events well.

This whole sad case reminds me of the battle between Budweiser in the U.S. and Budějovický Budvar, aka Budweiser Budvar, in the Czech Republic. It’s complicated, but basically, both American Budweiser and Czech Budweiser trace their roots back to the same small town, České Budějovice, in Bohemia. When the Czech beer grew in distribution outside of its home country, Anheuser-Busch took notice, and the lawsuits began. The upshot is that somehow, Anheuser-Busch distributes Budvar in the U.S. as Czechvar, but cannot use the Budweiser name in Germany and Austria.

Coincidentally, the Budweiser battle showed up in the news this week too. A European Union court ruled in favor of the Czech brewer (for the time being), rejecting an earlier EU court ruling as flawed. So the battle continues. This particular installment of the legal drama hinges on who is allowed to use the Budweiser name in Europe, and to what extent.

In both the beer case and the rum case, it’s hard to sympathize with Anheuser-Busch and Bacardi: both are known among more discerning drinkers for products that have traded wide appeal for quality. Of course, to discerning drinkers, that wide appeal is an utter mystery.

Why is Bacardi rum so popular? For the same reason vodka began outselling gin in the U.S. in 1967, and overtook whiskey as the best-selling spirit in America in 1976: it’s bland. When things have strong flavors, fewer people are going to agree about them.

I, for one, seek out the stronger, more polarizing flavors, and rejoice when I find some delicious ones in the process. Havana Club and Budvar are superb beverages that, on the basis of taste alone, deserve an American audience. I’m grateful that I can drink some form of Budvar in the U.S. now, and I’m hoping that someday we’ll get the chance to drink Havana Club here, too.

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One Response to More Booze Battles: Havana Club

  1. Pingback: Party Pooper Pusser’s Puts Painkiller in a Panic |

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