Komal Samaroo, Chairman of the Demerara Distillers Limited (DDL) group of companies, was elected as the new Chairman of the regional rum grouping, WIRSPA when its representatives met in Barbados last week.
According to a press release from the West Indies Rum and Spirits Producers’ Association Inc. (WIRSPA), the industry met to address a series of challenges being experienced in both the local and export markets. The export-oriented regional rum industry earns in excess of US$550 million in foreign exchange every year, but also depends on healthy local markets as its base. Samaroo pointed out that rum companies rely on their profitability in their local market to be able to finance entry into the highly competitive export markets where the regional producers compete with the global spirits giants.
The media bulletin from WIRSPA said that the regional brands continue to face an uphill battle against these companies, several of whom are benefiting from substantial subsidies provided through the United States tax system which provides them with ‘Cover-Over’ payments. These payments are in the form of tax rebates which are given back to producers in the US Virgin Islands and Puerto Rico when they sell rum into the US.
“Increasingly, we’re seeing brands entering our local markets which benefit from these subsidies and are selling well below what we would consider to be expected costs,” Samaroo was quoted in the press release, as saying. He further noted, “So not only are we up against subsidized brands in the export markets, but these brands are now entering local markets as well.”
“It goes against the WTO practices and it is just fundamentally wrong because you are taxing our rum coming in from the Caribbean at exorbitant rates to subsidise others, and that really and truly does not help our economic growth and development,” Barbados’ Minister of International Business, Industry and Commerce, Donville Inniss, was quoted in the media bulletin as saying, whilst speaking at a function to taste the rums of the regional group.
According to the release, the new Chairman of WIRSPA thanked his predecessor, Dr. Frank Ward for his stewardship of the organization over the past decade, whilst pointing out that it was a mark of maturity for the industry that leadership changes occurred within the context of continuity. Samaroo also thanked his colleagues for placing their trust in him to lead the regional body.