Pot of Gould – Bacardi and Pernod duke it out in Havana
Bacardi has been engaged in a legal battle with Pernod Ricard over the rights to the Havana Club trademark for years. But Patience Gould believes the US-based spirits giant is shooting itself in the foot, appearing to be a corporate bully while drawing attention to the primary characteristic that sets Havana Club apart from its own world-beating brand - its Cuban origin.
There must be times when Pernod Ricard wishes it had never taken on the Cuban rum Havana Club. Not because of the brand itself - that's going from strength to strength. No, it's all to do with Bacardi and the litigious shadow it casts over the French multinational, seemingly at every turn.
Lawyers in the US and Spain must be rubbing their hands with glee as Bacardi pursues and contests whether Pernod's joint venture with the Cuban government has the rights to the trademark. A Spanish appeal court ruling most recently found in Pernod's favour, but Bacardi is now planning to take that case to the Spanish Supreme Court.
A statement issued by Havana Club International shortly after the ruling reads: "The court recognised that the prestige of the Havana Club trademark was the direct and sole result of the long-standing commercial efforts and investments by Havana Club Holding (jointly owned by Pernod Ricard and the Cuban government). Bacardi's action was therefore considered unfair and abusive, with the sole aim of damaging a competitor."
Bacardi's decision to appeal this ruling is perhaps surprising in itself, but its quest to upset the Havana Club rum-wagon is even more baffling given that its own eponymous rum is not doing that badly - 20m or so cases a year not badly to be precise, compared with Havana Club's 2.4m tally.
Furthermore the US, where Bacardi boasts almost a 50% share of the market, with its serious clutch of brands also including Dewar's Scotch Whisky, the gin Bombay Sapphire and the dynamic vodka Grey Goose, remains forbidden territory to the Cuban rum. Most folk of a reasonable inclination would think that enough - but not Bacardi.
The irony is that the ongoing legal tussle is only giving Havana Club more publicity, and more importantly highlighting its critical USP - its Cuban origin - while at the same time leaving Bacardi looking like the bad boys.
As one industry pundit put it, "I can't believe what Bacardi is doing. They're just giving themselves a really bad name - and that's a shame when you consider their portfolio of brands."
As for Havana Club, it is now one of the fastest growing spirits brands worldwide, and has experienced double-digit annual growth since Pernod formed the Havana Club Holding joint venture company with the Cuban government in 1993. The joint venture's avowed aim is to develop Havana Club into a 5m case brand by 2013, and this goal is unlikely to dent or affect Bacardi's huge business, or its modus operandi.
However, instead of concentrating on safeguarding and bolstering its relatively unassailable position in both the white spirits market and the rum category, Bacardi has resorted to a defensive offensive - or should it be an offensive defensive - course of action in the courts. For years, the party marketing line was that Bacardi is Bacardi and the fact that it's a rum from Puerto Rico has always been very secondary. Now though, with the vigour it is pursuing Havana Club it is demonstrating to the world that it believes that the Cuban brand is the real McCoy of rums - and that Bacardi is not.
The harsh fact is that the average consumer is not that bothered about the heritage of rum - as proven by Bacardi's own success. The Cuban heritage is a definite plus on the marketing front for Havana Club, but it's not an instant passport to success. There are other factors that have to be added to the marketing pot pourri. But for all Bacardi's efforts to upset Havana Club's progress, the company has been shooting itself in the foot.
Of course, it was tough for Bacardi that it lost assets as a result of the Cuban Revolution, though it should be borne in mind that it did not link up with the Arechabala family, which originally owned Havana Club in Cuba, until the 1990s. But all in all Bacardi hasn't done badly since fleeing Cuba, so it's difficult to feel that sorry for them.
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