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Pernod Ricard lines up Cuba price rise for Havana Club

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Pernod Ricard is to raise the price of its Havana Club portfolio in Cuba by as much as 15%, the rum brand's first increase in the country in years.

Havana Club rum is operated through a JV between Pernod Ricard and the Cuban Government

Havana Club rum is operated through a JV between Pernod Ricard and the Cuban Government

Cuba accounts for more than a third of the 4.5m cases of Havana Club sold annually and almost one-quarter of sales. However, prices are much lower than in other countries, because they are set through negotiations with the country's Government, which operates the joint-venture with Pernod over Havana Club.

A 70cl bottle of the core Havana Club three-year-old white rum in Cuba costs the equivalent of about US$6. In France, the same bottle costs about EUR17 (US$20).

Speaking to just-drinks last month, Pernod's Havana Club International CEO, Christian Barré, said a proposed price increase has been sent to the Cuban Government and negotiations were ongoing. Barré said he was "confident" the price increase will pass.

"Depending on the product, we are targeting between 10% and 15%," Barré continued. "Prices haven't been increased for many years, so we want to catch up a bit. The price for Havana Club 7 went up two years ago, but that is the exception."

Asked if the pricing process in Cuba was a challenge for Pernod, considering Cuba is a major market for Havana Club, Barré said negotiating with the country's Government is "not very different to changing prices in Europe with the big supermarket chains.

"In Cuba, we proposed a price increase for our range a couple of months ago, and we are now in a negotiation phase," he explained. "That will go through different steps with customers like the key hotel chains, and then needs to be validated by the Minister of Finance."

"Havana Club is a kind of rebel brand. It is important to protect that" - just-drinks meets Pernod Ricard's Havana Club CEO Christian Barré


Sectors: Spirits

Companies: Havana Club, Pernod Ricard

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