New battle lines drawn in Cuban rum wars

New battle lines drawn in Cuban rum wars
Wed Aug 9, 2006 5:50pm ET173
By Angus MacSwan

MIAMI, Aug 9 (Reuters) - With the cocktail-drinking classes thirsty for
mojitos and daiquiris, a new front has opened up in a Cuban rum war that
has its roots in the ailing Fidel Castro's 1959 revolution.

The Bacardi liquor company this week will begin selling its Havana Club
brand in the United States after winning a 10-year trademark dispute
with Cuba and the French firm Pernod Ricard (PERP.PA: Quote, Profile,
Research).

But Pernod Ricard, whose own Havana Club rum is popular in Europe and
Havana tourist spots but is banned in the United States, said it still
owns the name Havana Club and will appeal U.S. patent authorities'
ruling that Cuba's trademark registration had expired.

This latest phase of a long-running fight that epitomizes the tussle
between Cuba's Communist government and exiles across the Florida
Straits arose just as Castro's long rule over the island appears to be
waning.

The 79-year-old leader handed power temporarily to his brother Raul
Castro on July 31 after abdominal surgery.

Bacardi's Havana Club is based on the original 1935 recipe by the
Arechabala family, who produced it in Cuba until their business was
seized by Castro's government in 1960.

Bacardi, owned by a Cuban exile family, bought the brand from the
Arechabalas in the 1990s. The new rum is made in Puerto Rico.

In the meantime a joint venture between Cuban state company Cubaexport
and Pernod Ricard has sold Havana Club-branded rum made in Cuba in
countries outside the United States.

MACHINE GUN TO HEAD

Cuba says it obtained the Havana Club brand in 1976 after the patent
lapsed. U.S. courts ruled the Cuban-French venture had no rights to it
in the United States and U.S. patent authorities last week said Cuba's
trademark registration had expired.

Ramon Arechabala, former sales manager for his family's firm, and now
aged 70, recalled the day on Jan. 1, 1960, when the authorities took
over the distillery in Cardenas.

"Che Guevara's bodyguards came over and said 'You've got to get the hell
out of here.' They pulled out machine guns and put one to my head," he
told Reuters.

He left Cuba about a month later, never to return.

Bacardi's decision to sell its Havana Club rum in the United States
takes place at a time of unease in Cuba because of Castro's illness.

"That's just coincidence," Bacardi USA vice-president John Gomez told
Reuters. "This is something we've been planning for some time."

Miami-based Bacardi USA's marketing campaign will evoke exotic
pre-revolutionary Havana, when the city was a lusty tropical playground
for gamblers, tourists and celebrities.

"It recalls the sultry high life of yesteryear in Havana," Gomez told
Reuters.

For the time being, the Havana Club rum drunk in Havana's Hotel
Nacional and bars such as the Floridita will be Pernod Ricard's.

Pernod Ricard communications head Francisco De La Vega said of the
Bacardi version. "It is not a Cuban product. That is not fair and is
misleading to the consumer."

The Pernod brand used only Cuban sugar cane and was produced by master
blenders in Cuba, he told Reuters from Paris.

Boosted by a trend for all things Cuban, sales have gone from the
300,000 cases in 1994 to an expected 2.4 million cases in 2006, despite
having no access to the U.S. market.

"What makes Bacardi annoyed is that we have had a lot of success. They
feel threatened that when the embargo ends, we will be able to sell in
the United States," he said.

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