The local rum industry could face the possibility of collapse if swift efforts are not made to resuscitate the dying sugar cane industry here.
Furthermore, Mount Gay Rum’s management said they were concerned about the continued heavy subsidization of the United States Caribbean territories which was driving other regional rum producers out of the market.
Speaking to BARBADOS BUSINESS AUTHORITY during the company’s 310th anniversary celebration and brand-renaming reception at its Spring Garden location on Thursday night, managing director Raphael Grisoni said that if the sugar cane industry in Barbados was not saved, it would have a direct negative impact on Mount Gay’s operations.
“It will have a direct impact on the cost of production because today we are not self-sufficient in molasses. So if we are losing the local molasses, the imported molasses, which is some 40 per cent more expensive than the local one, will impact directly on cost of production and what margin we can have.
“In the mid-term it would mean that we would lose our market share for everywhere for sure. So it is a threat. It is a threat,” he lamented.
Rum is made from sugar cane by-products such as molasses or directly from sugar cane juice through the process of distillation or fermentation.
And as a result of the likely threat to the industry, Grisoni said, Mount Gay had invested heavily in brand promotion in overseas territories with the aim of quickly growing market share.
The rum producer recently started exporting products to Russia, China, South Africa and India. It currently exports about 80 per cent of its production, generating approximately $25 million annually.
However, Grisoni was quick to point out that those efforts to grow overseas markets might not be enough without a quick restructuring of the sugar cane industry.
“We are hoping that the structuring of the sugar industry would increase the yield of molasses production,” he noted.
In addition, commercial director Andre Thomas said he was satisfied that Government through the requisite ministries was aggressively tackling the issue of subsidies.
Meanwhile, Grisoni said he was sad that many countries in the Caribbean had not joined Barbados in its battle against unfair trade practices in the sector.
Delivering remarks during the celebrations, Minister of Industry, International Business, Commerce and Small Business Donville Inniss pledged Government support to ensure that the local rum industry was not squashed by “powerful giants” in the global market. (MM)
