Bacardi's brawl with Castro overflows into Scottish bars

The rum wars fought at the height of Fidel Castro's Cuban revolution have spilled over into Scotland and the rest of the UK.

In what has become known as the "Bacardi battles", the drinks giant is at the centre of devastating commercial and political allegations involving the the White House, the barrios of Havana and the high streets of Britain.

In the UK, the company stands accused of paying pubs and clubs hundreds of thousands of pounds to make sure they will not stock its main competitor brands, particularly Castro's Havana Club.

At the same time, a new row is brewing up over Bacardi's part in setting up trade laws to undermine Havana Club and stop profits from its sale pouring into the coffers of Castro and Cuba.

Among the Bacardi associates whom it paid to help write the laws is Otto Reich, George Bush's current choice as under-secretary of state for Latin American Affairs.

The company's 40 year vendetta against Castro's government began when the Bacardi family had their properties in Cuba nationalised. Their secret war against the Cuban revolution is exposed in a book due to be published in September.

Bacardi is currently being investigated by the UK Office of Fair Trading after it allegedly made "exclusivity agreements" with the National Union of Students and other bars across the country.

The allegations relate to Bacardi giving perks and incentives worth hundreds of thousands of pounds in return for the bars not stocking competitor brands, including the white rum's emerging rival the Cuban brand Havana Club.

Issuing what it refers to as a provisional ruling against Bacardi, the OFT says it could face a fine of up to 10% of its UK turnover - approximately (pounds) 40 million.

"On June 28 last month, the OFT wrote to Bacardi, requiring the company to make written and oral representation in response to our decision to investigate allegations that the company infringed Chapter II of the Competition Act 1998," confirmed an OFT spokesman. So far, Bacardi has failed to comply.

"They were given eight weeks from June 28, and the clock is still ticking," warned the spokesman.

According to the trading watchdog, initial complaints about Bacardi's alleged malpractice came to their attention in the summer of 2000. These were made by an individual but were quickly followed up by those of "another drinks company".

Incentives worth substantial sums of money were said to be offered by Bacardi to private bar owners. In the case of the National Union of Students, the deal was worth (pounds) 650,000.

Hector Lazcano, Chilean owner of Hispanic theme bar El Barrio, in Edinburgh, said: "I effectively embargoed Bacardi from my bar two years ago. For a year we stocked no Bacardi at all.

"A few months ago a salesman came by and persuaded me to put my political ideals to one side. Bacardi have never offered us incentives to take Havana off our shelves, but they do make it worth your while giving their brand priority."

Derrick Sutherland, part owner of Cuba Norte in Glasgow, said: "Bacardi hasn't come near me since my first encounter with them three years ago. They asked me what sort of figure it would take to remove Havana Club from my gantry.

"I didn't think that was very good practice so I said if that's the way you want to play it I'll remove Bacardi instead. I think these offers from Bacardi to Cuban theme bars were common practice."

Responding to the latest trading allegations, a Bacardi spokesperson said: "We have been in contact with the OFT for sometime and are vigorously defending our point of view. It's really just another chapter in a long-running dispute with another international company."

The accusations come just weeks before the publication of Bacardi: The Hidden War by Hernando Calvo Ospina.

Copyright 2002
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