Focus: Spirits

Rum’s the Word

Rum’s the Word

Apr. 28, 2013

A classic tipple, or as part of an exotic cocktail, rum has an influence that goes deep into the local economy.

Rum has always been an important part of the Dominican Republic's economy. The majority of the rum market is made up of the Three-Bs: Barceló Export Import CxA (Beica), J. Armando Bermúdez & Co., and Brugal & Co. Each of these companies has a long and distinguished history in the rum-making business, dating back to the 1800s. Brugal is one of the largest companies with an 80% share of the domestic market. The rum industry is a significant employer of Dominicans, and the country produces 31.8 million liters of the nectar annually. The total Caribbean rum market is estimated to be worth between $600 million and $1 billion, with the Dominican Republic exporting approximately $135 million annually. The Dominican Republic is not only a major contributor to the Caribbean economy, but also a leader in the rum market as a whole.

The Dominican Republic is a part the Caribbean Forum (CARIFORUM). This group is composed of 15 Caribbean countries, and the main purpose of this organization is to create dialogue with the EU. In 2008, both parties signed an Economic Partnership Agreement (EPA), meaning that the CARIFORUM countries are able to enjoy tariff-free preferences in certain categories for “heavy rums" and lower-valued rums. The EU is a major export destination for the Dominican Republic, as well as the entire Caribbean region. In 2011, all CARIFORUM states exported nearly $130 million worth of rum to the EU with the Dominican Republic contributing almost $81 million of those exports.

Another major market that the Dominican Republic exports to is the US. In 2011, Dominican companies exported over $40 million worth of rum to the US. The rum industry is the fourth largest non-service sector earner of foreign exchange for the Caribbean after sugar, bauxite, and bananas, bringing an estimated $500 million into the country according to the West Indies Rum and Spirits Producers' Association (WIRSPA). As rum becomes more popular around the world, new markets will begin to open up, as seen in the increasing exports to Russia and China.

A significant contributor to the exports to the EU and the US is Beica. Approximately 75% of Beica's production is exported, totaling 1.7 million cases annually. Beica sends a significant amount of rum to the EU, with 900,000 cases going directly to Spain. Operating in 55 different countries, Beica is truly an international company. Although a large part of Beica's business is dealing with exports, that doesn't mean the domestic market is not important to the company. In 2009, the company sold 100,000 cases locally; in 2012, it reached 400,000 cases. Alberto Nogueira, CEO of Beica, expects sales domestically to reach 1 million cases for the company within the next three years. As 70% of the rum sold on the domestic market is high-end rum, this increase in sales will be very lucrative. Beica has been enjoying some great successes in recent years, moving from 22nd up to 7th in the global rum market. It was also recently awarded the “World's Best Rum" prize by the Chicago Beverage Tasting Institute, scoring a record 97 out of 100.

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