The Caribbean Community and Common Market (CARICOM) Threaten to File a Complaint For Ongoing Rum Subsidy Batle

(News Brief by Shanken News Daily) The Caribbean Community and Common Market (CARICOM) is threatening to file a complaint with the World Trade Organization (WTO) against the U.S., regarding the region’s ongoing rum subsidy battle. The organization has been critical of recent measures taken by Puerto Rico and the U.S. Virgin Islands to use U.S. government refunds to create subsidies and incentives for large international rum producers like Bacardi and Diageo. CARICOM is claiming that the subsidies violate WTO regulations and make it impossible for smaller rum players to compete. Triggered by Diageo’s 2010 decision to shift production of its Captain Morgan rum brand from Puerto Rico to the USVI after being lured by higher rebates, the Caribbean rum war has since resulted in increased incentives for Bacardi—which does much of its production in Puerto Rico—as well as Beam Inc.’s Cruzan rum distillery in the USVI.