Havana Club is an iconic brand that as we
approach normalization of relations with Cuba has become a valuable property
that was thought to be worth nothing in 1973 here in the United States when the
trademark was about to expire. The story
of the rum war between Bacardi and Pernod Ricard is loaded with a history of
bad decisions and revenge.
The Arechabalas introduced Havana Club
with Americans in mind in 1934. The name
of the Cuban capital was spelled in English, rather than the Spanish
"Habana." Soon Havana Club was served in places such as
the Stork Club, a high-society night spot in Manhattan. The Arechabalas, according to Gjelten, sympathized with
dictator Fulgencio Batista, whom Fidel Castro overthrew. Soldiers showed up at the Havana Club office
on New Year's Day 1960. The late Ramón
Arechabala was a sales manager, while one of the top executives, his uncle José
María Arechabala, or "Pepe," was in Spain. "From now on, I am Pepe, and you people
will do as I say," declared a military commander, as Ramón Arechabala
recalled in court testimony in 1999.
"I say, 'Okay, no problem, whatever
you say,' " he testified, "because he was armed with a machine
gun." Ramón Arechabala, went on to sell cars in Miami. In 1973, he realized that the Havana Club
trademark was due for renewal. He asked
his uncle whether they should file the paperwork. His uncle said no. The family did not have
enough money to produce rum in the U.S. and mistakenly believed they couldn't
renew the trademark without making rum.
"He told me we could not do anything right now with it, because,
'Let's wait because we might be going back to Cuba any moment,' "
Arechabala testified.
In 1976, a state-owned Cuban enterprise
secured the American trademark for Havana Club. It was a cunning yet hopeful investment in
the day when Cuban rum might once again be poured on the other side of the
Florida Straits.
The
rum war was declared nearly 20 years later, when two things happened. In 1993, news broke that Pernod Ricard had
struck a deal to become equal partners in Havana Club. In 1994, Bacardi filed its own application
for the U.S. trademark for Havana Club. Bacardi paid the Arechabala family $1.25
million for any rights to Havana Club that the family still possessed, plus a
fraction of any sales of Havana Club. Ever
since, Bacardi and Pernod Ricard have battled on legal, regulatory, political
and commercial fronts.
This seems
like a battle that will never be settled, it looked like it was settled back in
the early 2000’s when the Supreme Court ruled in favor of Bacardi, but with the
easing of relations with Cuba it has reared its ugly head again.
Read the entire story at https://www.washingtonpost.com/business/havana-club-v-havana-club-inside-the-rum-war-between-bacardi-and-cuba/2016/07/22/57c32a06-2cb4-11e6-9b37-42985f6a265c_story.html
