Rum producers from French overseas departments (counties) have been given a 50% tax break on excise duty charged on sales within mainland France, stretching until December 2012.

The European Union (EU) Council of Ministers has approved the derogation from standard EU excise rules, after French government claims that these rum manufacturers are vulnerable commercially.

Most are based on the Caribbean islands of Martinique and Guadeloupe and the Indian Ocean island of Réunion. Together, the sector produces annually rum worth EUR250m. The tax break will cover rum containing up to 108,000 hectolitres of pure alcohol, annually.

France claimed in council documents these rum producers' "inability to compete" was because of increased production and labour costs since 2001, partly through new EU environmental and health rules adding 10%-15 % to costs.

Since 2002, annual shipments from these producers to the mainland EU has fallen by 12% to 155,559 hectolitres.