Bacardi - supporting the blockade since 1962

Spring 2014

Bob Oram reports on the real history behind the Bacardi label

Imagine you live in the USA. Imagine you own a company and you are being taken to court charged with copying another company’s trademark. Imagine that just before the start of the trial you procure an amendment to the law.

Your amendment is known as Section 211 and although reports at the time show no evidence of any Congressional considerations when accepting this amendment, legislation before the 109th Congress references lobbying efforts on behalf of the ‘Bacardi company’. Specifically in S 1604 109th Congress §2(a)(3)(2005) it states the amendment “has been of singular benefit to that defendant in the courts”. Section 221 was moved by infamous anti Cuban, anti Chavez, Miami Republican representative Connie Mack.

This case and the dispute that broke out was not your average boring trademark case. This was legal wrangling mixed with hot politics. Bacardi’s bitterness, its aggressive commercial competiveness, its long history of lobbying in Washington all reflect two consuming obsessions - making money and overthrowing the Castro government.

Havana Club was first produced by the Arechabala family in Cuba in 1934. They fled in 1959 and held onto only the US trademark rights. In 1973 the family did not renew its registration. Cuba, who had already bought up the Havana Club rights in countries around the world, was able to register the brand in the US in 1976. When state owned Cubaexport entered into a world wide distribution relationship with Pernod Ricard in 1993 the US Patent and Trademark office approved the transfer of the trade mark to Havana Club Holdings (a joint venture) in 1995. Although the blockade continued to stop sales in the US, in a few years Pernod sold nearly 40 millions of bottles of Havana Club worldwide. Assuming the blockade would eventually end it was planning for big sales in the United States. This was a direct challenge both politically and commercially to Bacardi who immediately started to fight back.

A company which for some decades had tried to bury its Cuban origins now rediscovered its roots. Its rum began to mention prominently that the company was founded in Santiago de Cuba in 1862 irrespective of where it was now made.

When it started producing rum under the ‘Havana Club’ label in the US in 1996, Havana Club Holdings filed suit against Bacardi for trademark infringements. The case was initially going in Pernod’s favour, as the Judge made her rulings based on existing law. Having just finished drafting the infamous Helms Burton Act (1996) Bacardi were now deploying their lobbying and legal clout to defend themselves whilst also claiming to have bought the trade mark from the Arechabala family in 1997. In 1999 Section 211 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act became law. It denies protection in the United States to a ‘mark, trade name, commercial name that is the same or is substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated”. It prohibits payment for registration of such rights and prohibits US courts from hearing any trademark claims brought by foreign nationals to defend trademarks in the US, if those marks are ‘substantially similar’ to a mark that was used in connection with confiscated assets.

In the end, the judge broke new legal ground by accepting this retrospective and clearly privileged legislation as binding, since Pernod asked for an injunction against future use of its trademark. Judge Shira Scheindlin decided: “At this point, because plaintiffs can sell no product in this country and may not be so able for a significant length of time, they suffer no impairment of their ability to compete as a result of defendants’ actions. Any competitive injury plaintiffs will suffer based upon their intent to enter the U.S. market once the embargo is lifted is simply too remote and uncertain to provide them with standing.”

It was yet another outrageous case of the United States flouting treaties and international law, and the judgment is not recognized anywhere else in the world-a point emphasized by the World Trade Organization (WTO) shortly afterwards.

Even so, the US patent office threw out Bacardi’s attempt to register other names containing ‘Havana’, because the company was claiming a spurious connection to the city, which could have confused drinkers who thought they were buying rum from Cuba.

When the European Union filed a dispute with the WTO, Bacardi, who are literally ‘unshameable’ said: “Pernod Ricard has pressured the EU into filing a claim with the WTO in an attempt to politicize a purely civil dispute. Bacardi views this as a private civil matter and one that is not connected in any way to world trade laws or the WTO.”

Others begged to differ, not least the WTO who found in 2001 that the American law violated free-trade agreements, and the US trademark office has refused to revoke Pernod’s registration despite even more litigation and lobbying by Bacardi. “The conduct of the US unscrupulously discredits the WTO dispute settlement system and also constitutes an affront to the intellectual property rights” said a Cuban Ambassador at the WTO.

Although Bacardi had fled Cuba in 1955 to the Bahamas, they are now headquartered and incorporated under Bermudian law selling worldwide in over 150 countries. The rum trademark is held in Liechenstein and it is made in seven countries around the world but not Cuba. Although they seduce the hedonistic young with stylised sexy Salsa dances and images of sun kissed glamorous Latin lifestyles, having nothing of Cuba in its rum is a big business drawback.

That is why their advertising strategy today is even more geared to the island where they originated. Bacardi sold billions of dollars worth of drinks last year mainly though its six global brands - Bacardi rum, Bombay Sapphire gin, Dewars whiskey, Eristoff vodka, Grey Goose vodka and Martini Vermouth. But it is never enough, It is because Bacardi is purely associated with party drinks and specific mixers (who has ever ordered a straight Bacardi?) that the company is desperate to have the renowned Havana Club brand as part of its own stable. Quality rum is enormous business around the world and Bacardi know that any damage to the real Havana Club brand will hurt the income of the Cuban state.

Offshoring before the triumph of the revolution worked well for Bacardi. They had already fallen out with Batista and assumed Fidel would be like any other coup leader once in power. The Bacardi building had greeted the arrival of Fidel and his comrades into Havana with a banner saying “Gracias, Fidel!” In common with some other rum producers, they had supported the rebels financially. Wilma Espín, who married Raul Castro in January 1959 was the daughter of Bacardi lawyer, Jose Espín. Bacardi hosted the wedding in a lavish ceremony attended by Fidel. Later that year, the Cuban trade delegation to the United States had included Juan Pépin Bosch and Daniel Bacardi, two of the Bacardi’s family heads.

That all changed after nationalization and Bosch then bought a surplus US Air Force B-26 Marauder bomber in order to attack a Cuban oil refinery. Later a confidential CIA memo claims Bosch offered members of the Mafia $60,000 to assassinate Fidel. For many years he was a major financier for the Cuban American Lobby and the man who brought the United States to the verge of trade wars with the rest of the world. Bacardi are ‘untameable’ in their lobbying of legislators to exercise their anti-Cuban prejudices, regardless of general principles of international or domestic law, and then in paying lawyers to implement the resulting legislation.

They have succeeded in forever associating Bacardi with a United Nations condemned blockade of Cuba and a trade war with the rest of the world. They have provoked opposition from companies who do not want to see international trademark law ridiculed in the course of the family’s Cuban obsessions. At the same time family’s association with some of the most reactionary Cubans and well known terrorists, compromise their reputation and bring shame on the name.

No one appreciates their crimes against rum either. Bacardi has elevated a drink with the taste of bland lighter fuel into the supreme mixer drink of choice. Its monopoly power wants to exclude all other brands from a market share. Other Cuban rums cannot even get a toehold in the market and quality Caribbean rums all struggle to compete with US tariff protected and highly subsidised American corn farmers. Any chance on marketing a quality, value-added, branded rum is frustrated by the ubiquitous transnational ‘black bat’. Bram stokers book Dracula, features a title character that turns himself into a bat after sucking the blood of his helpless victims. It is an apt company image for a family that is trying to turn its rum into something drinkable while sucking the life out of its history and competitors.

Following the Bacardi adverts on the London underground, and specifically near the CSC office at Angel, CSC immediately made an official complaint to Transport for London (TfL), arguing that the adverts contravened their own guidelines:In a letter to London Mayor Boris Johnson and Mike Brown, Managing Director of London Underground on 4 April, CSC Director Rob Miller wrote:

“The content of the advertising is clearly part of Bacardi’s ongoing dispute with the government of Cuba over the nationalisation of the Bacardi Company in 1960. The content and tone of the advertising is an attempt to portray itself as a political victim of Cuba, and to prejudice the public against the government of the country.

“Transport for London’s own advertising policy says that adverts won’t be accepted if:

3.1 (p) the advertisement relates to a political party or parties or a ‘political cause’.

“During the last 50 years Bacardi’s ‘political cause’ has included financing various attempts to overthrow and undermine the legitimate Government of Cuba, including funding the Cuban-American National Foundation (CANF) which has had links to groups using violent methods to attack the country; using its own company lawyers to help draft the US Helms-Burton Act, which extends the United States blockade of Cuba to third countries, in breach of international trade law; and attempts to prevent Cuba marketing licensing the trade mark for its own Havana Club rum in other countries.

“The US blockade is at the heart of Bacardi’s ‘political cause’. It prevents the sale of food, medicines and other essential supplies to Cuba and threatens companies in other countries, including Britain, if they trade with Cuba. In 2013, 182 countries, including Britain, voted against the Blockade at the United Nations.

“The current advertising campaign is part of this ‘political cause’ and we therefore ask London Transport to adhere to its own guidelines and remove the Bacardi campaign from these public premises.”

Just as CubaSi went to print TfL responded: “The Bacardi advert you’ve mentioned was considered acceptable by CBS Outdoor as it doesn’t contravene any of these guidelines or standards. However, I am grateful for you bringing your concerns to our attention and I have passed your complaint on to our advertising team. They will keep a record of your complaint and consider your feedback when looking at future designs.

If you do still have concerns you are welcome to contact the Advertising Standards Agency directly so that they can investigate if necessary.”

Barcardi’s desperation to focus on the “authenticity of its origins” is in part a testament to the popularity of Havana Club rum and to the campaign to expose the truth about the company.

But Bacardi’s real history and origins were not bourn out of the company’s “true grit and determination” as their marketing agency BETC London would have us believe, but actions of greed, profit seeking, opportunism, and at first violent and later legal scheming to destroy the economy of Cuba and cause suffering to its people.