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Bacardi vs Pernod Ricard | Does Cuba Still Love Havana Club? | 7

2021-08-04

For Cubans, rum is more than just a drink. It's become a symbol of identity, culture and politics, and each bottle has a lot to say — especially when it's labeled "Havana Club." 

As Bacardi and Pernod Ricard battle it out in court to determine the true owner of this traditional Cuban liquor brand, there is a larger cultural and geopolitical conversation unfolding. 

To dive into this discussion, we spoke to Professor Lillian Guerra, a Cuban-American historian and Director of the Cuba Program at the University of Florida. She talks about Cuban economics, culture and policy as they relate to Bacardi, Pernod Ricard and Havana Club — and she's revealing her take on who has the real stuff.

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Join one replies to listen a business wars one week early and ad free in the wonder, YAP down The wandering app in your apple or Google play Mobile Appstore. Today. Wondering I'm David Brown and this is business.
Like the wrong that fills their oak barrels, the battle between liquor giants, Bacardi, Inferno, Ricard, has aged four years. The bitter dispute over the rightful owner of the Havana Club trademark has spanned generations. Yet for the families that produce this traditional cuban rum and the loyal fancy drink it. This war is about more than just a trademark. It's a fight, grounded in cuban identity, culture and politics and is far from over. But before we can ask the real Havana club to stand up. We ve got a wade through a murky pool of legal grey areas, government alliances and fickle geopolitical policies guiding us through. All this is our guest. Today Lillian Gara cuban American author historian and professor the University of Florida and the director of their Cuba,
Ram will be talking about where the spirits battle stance from a cuban perspective, exploring the island's economics and the future of Havana Club on the american stage. All that's coming up. if you're working round the clock to build your dream, e commerce, business, you need and E commerce marketing platform that works. Joy, his heart. As you do It means you need Clavijo with Clavijo You'll delight customers and drive revenue at the same time with personal email and sms marketing campaigns. can design and sand in minute, plus Billy Marketing campaign is just a drag and drop away. and get started with your first campaign and under an hour to get started with retrial of Clavijo visit clay, the ode dot com, slash, listen, that's k, L, a v! I why oh dot com,
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going to an what. What's the current situation between Bacardi Inferno Ricard well. I don't know that it has changed in any way. The cuban government is very committed to working with its partners that promote recurred in as far as I know that by an administration has not taken any steps to arm to the the lawsuit that guarantee has filed, so we were still at a standstill there. yeah. I was curious about how much the cuban people themselves know about this rivalry. Do you have a sense that every day Cubans persons on the street are aware of this battle? I am certain that back Whaley Unaware, I do think they have very strong opinions about rum and and particular Havana Club, as they have experienced it on the island
but that they know anything about. This really would be impossible by. The cuban government has very little transparency with regard to its own budget and its own income or the states expenditure. So you know something like this will not make headlines unless it's politically expedient, so if they are to win their battle, that I assume you know, though it'll be all splashed all over there ass on these paper bed. Until then, nothing well for our listeners and perhaps others who are joining us fresh in one corner. You have per no claiming Havana club must be made in Cuba than in the other corner, there's Bacardi, who says they can make it in Porter Rico, since they have the recipe history in cuban family identity on their side. We're talking about the founders in this case. In your mind, who has the real stuff? You know
gets very interesting to say that my knowledge of cuban rime and whereby can be produced it comes from the island and in Cuba, when Havana Club started B coming. You know a regular item on display in dollars to worse stores it sold in dollars to foreigners and in hotels. Cubans were convinced that it was not being made properly because they weren't using the old barrels. Barrels that are still out in Oriente enriches the far eastern province and they were using met barrels and distillery? You know that was relatively recently acquired into modern, so that there was no way that what was being replicated there in Cuba, which resemble
we know that the real staff, so that argument is not on the table here between these two companies. They are both focusing all. They got different points of view, but one is focusing on the recipe and the other is focusing on the ingredients in the location, and neither company are talking about how the rum is actually aged and work kind of equipment is being used. My sense is that the really old barrels that are in the olden distilleries that were used by the bucket be family have nothing to do with the creation of this about a club and those are being used for another our remit label. That is mostly only available on the island and is extremely popular because it is so good and that that label is Anti Argolic were so. You have to buy it again for hard currency in dollars, stores are and who tells and tourist facilities, but it is mostly consumed locally, and it is why
we enjoyed. I made answer also my favorite rum about those available. Will you do you anticipated my next question, but I want to clarify something here. Are you suggesting that the real stuff is defined by the barrels that their their aged in what you say that is true and that you know they first of all that the barrels we're talking at the back any family used in the nineteenth century and through most of the twentieth century, were made out of cuban mahogany, and that has a particular density to it and it's one of the hardest woods in the world, so the trees that were used to but to build. These are to construct these You know over three hundred year old trees, two hundred year old trees, enormous
you're still avail awakened so see them in certain pockets of forest in both Santa Clara, an orientation in the mountains, so that ideal Cubans have very strong connections. Island Cubans have very strong connections to to these kinds of icons of their identity. The mahogany that these barrels are made out of seems to have a particular has cachet. We can say, will you its clear why this is such a fight, certainly from the cuban side, because, as is we're saying earlier, this is a big part of cuban history, cuban identity. Oh you know what what is real, what is ledge
damn it I mean all of these questions are coming into play. What does it mean to be cuban in a sense, but I want to get back to something you were saying to talk to your palette. You prefer the stuff made in Cuba. Let's talk about taste, the piano Ricard Havana Clubs pretty hard to find in the? U S, because the embargo- and I would imagine you have been able to try both versions. Yeah yeah, you tell tell us a little bit about the distinctions as you since them well, first about very silver dry and which has had a labour wavelength as white staff, Cuban in his right mind would drink. It is used for cocktails in Cuba. Cubans are of an older generation claim that you would never have used. and an aged kind of raw sugar cane wrong to make cocktails that you would have used at least a three year old rum
but then you get these older. You know they're the ones that are able five years etc. What they all have in common is that their draw, they haven't. There lie flavour to them, the one that is the he's dry as this to this sort of randomly labelled on Yahoo. Havana club, the no drier you get, the shorter, the finnish and Cubans like the taste to be syrupy almost to be in world strong, an intense and have along finish. So I'm a big believer in that too. I think that some of the best Packard be runs that I have tried. I've tried import the regal at their decision hurry. They have a kind of so later quality to them. What is you say so letter solar equality, solidarity, which is inserted the blending man very young runs with older ran. I said then produce a kind of syrupy thicker taste to the rum
and those are very, very popular today in the United States. Coercion states. We can only get both Parties- Havana Club, but with Pernod Ricard, actively working to get their version into the. U S market. Both brands clearly have a interest in appealing to the Eric and pallid. I suppose if there is a way to define such a thing, but what our Pineau and Bacardi doing, to try to win over the hearts and minds of: U S: consumers, as you said well, have watched quite a campaign to deepen the historical roots of this recipe at their distillery inward, the recall they they have a room that is, they actually shows shows old, run barrels and if he asked them there, poor guy. They will actually have to admit that there is really nothing old about them, nor are they from Cuba. But the sound that that is the author of the rest
b, has now been I'm sort of four grounded in the company's history and that significant, because a really until this lawsuit you know, was issued or took place Neither the parties are very happy in the bucket these, as we used correctly pronouncing were very happy to certain that you take the credit for every and then you would never have heard about this. This recipe, holder or recipe holding family we're not for the desire to authenticate the Cuban. This now, I think in the end, the campaign is it really working, where a really long time until again, till the lawsuit the bucket these were. Scots in Miami, and they were very upset about anything that would remind the consumer of communist
Aware of the triumph of the revolution added asked their minnow Fidel when I called it. So you see they really diminish tat. They kind of one or two projected idea assertive strapped lucky need I'd or abstract, caribbean identity and- and I think that most Americans came drink, but I D Rahman, eighties and in the early nineties, and and and really bought into that dear, so now for them to reverse coarse and say no were really Juba, it looks sorted, barren, desert not that convincing and a little weird whether we're in Cuba, of course, has been making a lot of big headlines of late. I'm gonna dig into that just a little bit more as business wars continues, our guest Lillian Gara cuban American scholar and author at the universe. Florida, there's more business, worse, coming up.
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identity and how to stay true to yourself: listen, a halo user id ping, identity, dot, com, slash podcast or on Apple podcast spy. Fi Amazon, music pocket casts or wherever you liked to listen ping identity. Championing identity security for the global enterprise. welcome back to business? Wars are good. Today is Lillian Gara. She is a cuban american scholar and author at the University of Florida. I mention before the break that Cuba's made headlines recently for the largest wave of protest against the governments. Since night ninety four or so, but you mentioned earlier that Cubans on the island They tend to have conversations about politics, to talk openly only behind closed doors, so I guess
wondering why people are speaking out now, as you see it. Well, oh, yes, hi hi conversations about politics behind closed doors, bed really from ninety ninety one till very recently about two thousand and ten fourteen two thousand fifteen Germans were having very, very credible conversations about the government in public, for I just not an organized actions that that means. You know in the hallways of the library. You know not in the classroom in your workplace went on your smoke break her when you walking around you know outside to stretch your legs or something that's where people were having a lot of conversations constantly, I mean they were able to, because the cuban state for a very long time, was unable to
force. You know what have been long standing legal restrictions on people's ability to express themselves and then, more importantly, on a kind of institutionalize popular culture of surveillance. So we're talking about one thousand nine hundred and ninety one to twenty twenty one were thinking about thirty years there and of her about twenty. You do Cuban's really got a taste of freedom, they felt they had the right to criticize socialism. They felt they had the right to criticize her policies they felt they had the right to make jokes about leaders because they got away with it. They got away with it because they were not in organise demonstrations or an organised and instructions. They were doing it. You know injures their everyday life of about two thousand fourteen as in fifteen negotiations with the Obama administration that were attended to and normalize relations with, Cuba included the demand on the part of U S, government that there be wifi access public wifi,
plazas and an open areas of Cuba and so that, starting in two thousand and fifteen two thousand sixteen. This has happened It is fast and a social media that has exploded in Cuba had been Facebook and what's up and those two are impossible connectors because their encrypted until the cuban government, hack into what you're saying this. What's an people to be inspired. I know that there is an organization at all. These protests are not organised. What did happen on sand if we started in one location and as soon as the videos of the repression hit the social media networks, then you got thousands of people across the island in towns and cities everywhere. Protesting opposite, Should a Cuba's become used to call me is an anything new, much that shows up in the Havana Club debate. As we have been discussing the economic upheaval that followed the revolution and fifty nine
curly rocked the island's industry in the buck, parties weren't the only ones who lost their company. What was it like for the other businesses that were NASH analyzed waiter, where they re tragic stories here of the nationalization of the businesses. Is that be those who took over? That means that the government or the supporters of the government took over. Many of them were simply a completely unqualified other than because of their loyalty to the government, so loyalty, trunk expertise and for the first ten years after one thousand nine hundred and fifteen, really after one thousand nine hundred and sixty, which is when the big nationalizations for the first ten years after that, Cubans found that a while the factories and have a nationalized simply ceased to function. Tell you you haven't a situation whereby the nineteen Seventys the crisis was so great and was an economic crisis generated largely by mismanagement of government resources and and these company
that the Soviets were invited to step in and Cuban did not become, in fact, until nineteen. Seventy two when it forge this deal a part of caricom, which was the view effectively. The soviet bloc that trading bloc in Russia, in the seventies you have for the first time, you know positive rates of growth and negative in the sixties. Now in the story, continues because effective way by that, at the end of the eighties, when the soviets are gone, you know, and the subsidies are gone. All of that collapsed and today it's it's always very painful to see Cubans or their relic, let us return to what were their stores are. There are their small businesses you know and and and realize you know what shape and an shambles and they have been, and not just for you no thirty year,
the press for longer than that? I think it a since you sort of anticipated, whereas going to next asking. That is how do you, since the economy is holding up in Cuba today right now, it's a complete disaster, Emmy and me had had zero tourism. Since the covert epidemic began raw, they responded very poorly. The government is fond of very poor. to that by deciding that no, it's dark and negotiate with anybody to get vaccine soldiers manufacture their own. They started trying to do five different map vaccines supposedly have to now and about twenty six percent of the population only is vaccinated. Cuba has been onto me locked down, and tourism was the
number one generator of income both for the state and for all of the local service providers and people who were small entrepreneurs. So that is, I mean to say that you know. Basically, that's gone means that their economy is at a standstill, inflation running about five percent. The government has no ability to get credit abroad because in part because of the embargo and in part because of his report, credit history and the economy it is non existent will focusing on the economic side of it. This might be a good place for us to reintroduce the Havana Club debate because, of course, foreign investors, like Pernod, at least in theory, could perhaps help with the tough economic situation there, and you know it. oh bag, allowing foreign investors into Cuba in the first place, was very off brand. Look it's the beginnings of that Renault. Hard relationship. This is a partnership that has stuck
nearly thirty years, are real I'd couple sort of deal. What is relationship like now that Miguel Ds Canal as the sitting president of Cuba, authority. The cuban government has in many respects shifting the burden of, or maybe the privilege is a better word of working with a foreign investors to the Ministry of the armed forces, because they are the guys with the with the weapons, and they are the guys who exercise the greatest power under rule Castra, whose main job during that Fidel Year, was to be head of the armed forces. So generals are the CEO of Cuba and they work in her hand in hand with their equivalents there, the chief financial officers as well or the Tom Brushed and military.
So there they operate under. I got a giant umbrella corporation call Geisha their controls. Eighty two percent of the economy right now, so foreign investors have always when they have worked with the cuban government they have had to make in This compromise is most of which never make the news. You know they We don't hear about that. These locations, that joint ventures with the cuban government, they you know in the landscape of Cuba, are filled with tensions, always, as is. I ve been talking about their relationship between Pernod Ricard and Cuba and the cuban government. At the same time, Bacardi became force to be reckoned with in the? U S, and I'm talking about not so much. The family is as as the brand right so refresh a little bit on how deep that relationship runs. I think they have very intelligently not taken positions that they might have favoured a race publicly with respect to the: U S:
ago, because they are very aware the bucket family, along with other big, an cuban families, are met. Aware of the fact that the cuban exiles community has been outraged to know in indifferent moments when it's been possible, that perhaps there should be a loosening the embargo, so that is really dampen the possibilities that waste openly these companies would seek our pressure. The? U S government to change it policies towards Cuba, which brings us in a sense to the here? And now, when we are talking about the debate over Havana Club and that larger geopolitical context right, I mean the cuban government has been blaming vaccine food shortages on the. U S embargo, it's not clear that we are currently in a In anything like the sort of relationship that President Obama tried to engender with the cuban government back when he back during his tenure
How do you see things now and moving forward under President Biden, and does it come down to that embargo question? Well, there are a number of problems. Let me embargo question in the sense that by no longer know, president can really just by decree or unilaterally Yang get rid of it. I M in Ino, after President Clinton and ninety ninety six allowed for the Helms Burton ACT to be signed. What we got was an embargo that can only be lifted if the? U S Congress lifts it. So TAT means a president can't do that kind of thing what he can do, how
is you know it allow were certain things to happen like a person to person, exchanges open up and put no restrictions on the amount of money that an American can send a Cuban on the island for a time from two thousand and fourteen to two thousand sixteen you handle it. That thing happening. These kinds of possibilities. Stand there as real options for Biden Outbreaks, circle, because you know our conversation. This has been really enlightening, certainly to me it all started over a bottle rum hand them I'm curious worked Congress to take steps to lift the amber, what do you see that meaning for the future of Havana Club? Well, I think it can. I have some stiff competition, and I think that you know it has certain an appeal, because its exotic, you know that
He always even more exotic back in the nineties. You know in the early two thousands- and I know that someone diminished, but so now question would be like what is it tastes like There are good, and that's a very interesting question and I think it has some competitors and in the U S, market fed with white. Beat it out pretty quickly, and so you know in the taste will have to be the main concern. The main factor in determine an success precisely because I dont imagine that very easily Bernard is going to figure out how to marketing in any event it is a state company. You know in some way you know it's it's arriving in the United States than that A lot of people would boycott it simply because it's a state company doesn't matter
There is a french label or name slapped on it will gotta be interesting to see what develops in the next few years, Lillian Garage professor of history at the University of Florida and an acclaimed cuban american scholar. Her latest book came out in two thousand eighteen. Is. He rose, martyrs and political, messiahs and Revolutionary Cuba published by Yale and she's got a new book coming out soon. Professor thanks so much for taking time to speak with his own business horse again, on our next episode. American gangsters travelled to the Nevada to make their dreams come true and change. The landscape of an entire region as LAS Vegas is born from wondering this is episode, seven of Bacardi versus per no regard for business. If you like us Please give us a five star rating in a review and be sure to tell your friends followers wars on apple pie casts Spotify, Amazon, music, the wonder reactor where every year listening right now listen at four
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Transcript generated on 2021-08-04.