Despite changes coming as a result of Brexit, Caribbean Rum will continue to be protected from unfair competition from subsidised cheap rum entering the UK market from other countries.
Following the UK’s exit from the European Union on 31 December 2020, the existing tariffs will remain and Caribbean Rum Producers will continue to benefit from a joint effort agreement negotiated by the industry and Caribbean governments to ensure this vital measure, in the form of a tariff on low-priced products, remains in place.
In late May, the UK published its new Global Tariff containing the list of import duties that will be implemented once the UK leaves the EU and takes control of its own trade regime at the end of 2020. Following a concerted effort by the region’s rum industry, CARICOM and CARIFORUM governments, the UK has maintained the ‘Residual Tariff’ on rum.
Komal Samaroo, Chairman of WIRSPA and the Guyana conglomerate Demerara Distillers explained “This vital, protective measure put in place by Europe some two decades ago, followed intense lobbying by WIRSPA producers, in collaboration with our counterparts in the French departments of Martinique and Guadeloupe. Its maintenance goes some way to levelling the playing field for our producers.” He added, “we wish to extend our sincere gratitude both to our Caribbean governments and to the UK for this very positive result.”
According to WIRSPA, the protective tariff was put in place to protect Caribbean rum producers from low-priced products originating from countries, which provide extensive subsidies to their local sugar and rum producers. Prior to the establishment of the tariff, studies had indicated that over 85% of the world production of alcohol was subsidised in one way or another.
Clement Lawrence, head of the Jamaica Rum Industry and Chairman of Wray & Nephew said, “The tariff continues to afford Jamaica producers of branded and specialised, bulk high ester rum, valuable protection in the market. This has played no small role in supporting the growth of Jamaican rum in overseas markets and its absence would lead to a decrease in the region’s share of the EU market.”
According to Vaughn Renwick, WIRSPA CEO, while this is a very positive outcome for the industry, the road ahead is still uncertain, “we do hope the UK and EU are able to agree to a trade arrangement that allows our products to move through Europe without additional red tape and costs. Going forward, we also will continue to work with governments to ensure that this arrangement remains, and that limited protections are not traded away in future negotiations”.