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Havana Club Maps New Routes To Crucial US Market
Impact International / Dec. 1, 2002

By Larry Luxner

HAVANA -- Producers of Cuba's Havana Club rum, embroiled for years in a legal battle against Bacardi & Co. Ltd., are developing new strategies to do business with US companies.

Havana Club Holdings (HCH), a joint venture between the Cuban government and French drinks giant Pernod Ricard, recently signed a contract to co-market tropical drinks from a Florida company and also reached a separate informal marketing agreement with California officials to promote rum-raisin ice cream.

During the recent U.S. Food & Agribusiness Exhibition at Havana's Pabexpo convention center, a contract -- the first ever involving Havana Club and a U.S. company -- was signed between Cuban food import agency Alimport and Splash Tropical Drinks of Fort Lauderdale, Fla.

The deal calls for Splash to supply piña colada and daiquiri concentrate to a unit of Alimport. The product will be mixed with Havana Club rum and promoted throughout the island's hotels and resorts.

"We're doing a co-marketing concept with Havana Club," explained Richard Waltzer, president of Splash. "They're going to market Havana Club rum with our American product and we, in turn, are going to work together to develop our sales and help Havana Club sell more rum. I'm targeting the tourist industry with these products. The average Cuban isn't drinking piña coladas at home."

Waltzer said Splash already enjoys strong sales in Puerto Rico and other Caribbean destinations. But the full results of his company's deal with Havana Club won't be realized until the US lifts its long-standing travel ban against Cuba. "That's when things will really take off," he said. "The American people are very curious about Cuba, and tons of people will come here."

HCH has marketed the rum brand worldwide since 1994 and hopes to sell it in the US upon the lifting of the embargo against Cuba.

The sudden interest by Havana Club in doing business with US firms comes as the long-running fight over the Havana Club brand name continues to simmer in the US. Bacardi has tried to eliminate the HCH registration since 1995, but its claim at the US Patent and Trademark Office (PTO) Trademark Trial and Appeal Board was put on hold pending the outcome of litigation between Bacardi and HCH.

That claim was reactivated by Bacardi earlier this year. But HCH filed a motion in early September, claiming that Florida Gov. Jeb Bush's lobbying on Bacardi's behalf constituted an improper "ex parte" contact with James Rogan, chief of the PTO, asking him to take "quick, decisive action" to cancel the Havana Club trademark registered several years earlier by HCH. HCH alleged Bush's letter to Rogan violated a federal law that requires the disclosure of that type of communication.

Gov. Bush's press office denied any wrongdoing and responded that the governor was simply looking out for the interest of a corporate constituent. Bacardi-Martini is headquartered in Bermuda, but its US operations are based in Miami.

HCH lost several legal battles to protect its brand name in the US largely because of a 1998 law that stripped US protection from trademarks that were nationalized by the Castro government. World Trade Organization appeals judges ruled earlier this year that the US must amend the 1998 law — Section 211 — that bans US courts from recognizing trademarks of Cuban companies that were confiscated when the Castro government took over in 1959, unless the original trademark owner has consented. But it's unclear how the US law should be changed and who owns the trademark in the US.

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