Six Issues Concerning the French Rum Business

On the subject of French rum, most lovers’ consciousness begins and stops with the truth that Martinique and Guadeloupe make rums from sugarcane juice. Dig a bit of deeper, although, and also you’ll discover a much more complicated story, unknown however to a couple individuals. In what follows, I’ll lay out a way more detailed perspective on France’s rum trade, which features a few surprises—even for a lot of rum consultants.

Be aware: Whereas the French name it rhum, the English model of that phrase is rum. Since that is an English-language article, I shall use rum.

Background

Most Caribbean and Latin America rum-making is in impartial states like Jamaica, Barbados, Panama, and Venezuela. Nevertheless, Martinique, Guadeloupe [i], and Guyane (aka French Guiana), additionally make substantial quantities of rum, but they’re areas of France. Legally they’re no completely different than areas inside France, e.g., Paris, Normandy, or Burgundy. It’s akin to how Hawaii is a full member of the USA, regardless of being a number of thousand kilometers from the U.S. mainland.

Moreover, Réunion, a French island within the Indian Ocean, additionally makes rum at a major scale but flies beneath the radar of most informal rum drinkers.

In additional exact phrases, Martinique, Guadeloupe, Guyane, and Réunion are French departments, equal in each approach to the 96 departments in mainland France. In French legalese, these abroad departments are collectively known as départements d’Outre-mer, abbreviated as DOM.

As French departments, Martinique, Guadeloupe, Guyane, and Réunion are topic to nationwide laws and management over their sugar and rum industries. Naturally, a lot of what applies to 1 division applies equally to the others.

1) Cane Juice versus Molasses Rums

Inside the rum world, the French Caribbean is legendary for its cane juice rum – rhum agricole in French. The agricole rums of Martinique and Guadeloupe obtain the lion’s share of consideration for French-made rum. Nevertheless, cane juice rums haven’t supplanted molasses rums to the extent you may guess. Actually, France makes extra molasses-based rum than agricole rum, which can shock some individuals.

Agricole/Industriel/ Traditionnel Terminology

The French time period for cane juice rums is agricole—agricultural in English. Molasses-based rums are also known as industriel (Industrial in English.)

French texts alternately consult with molasses rum utilizing the time period sucrerie. On this context, it means sugar refinery rum, i.e., molasses-based. Sadly, an alternate English-language translation for sucrerie is sweet or sweets. Google Translate appears to desire the latter that means, so French paperwork translated into English confusingly consult with “sweet rum” or related. It doesn’t imply sweetened rum. As a substitute, it means rum that would come from a sugar manufacturing unit, i.e., molasses rum.

With agricole and industriel outlined, we flip to a 3rd time period in widespread use, which many individuals misunderstand: rhum traditionnel.

In a French authorized context, rhum traditionnel refers to each cane juice and molasses rums from French departments. Sadly, many descriptions of French rum declare that traditionnel refers completely to molasses rum, principally, a synonym for industriel. Nevertheless, France and the European Union don’t differentiate whether or not it was produced from cane juice or molasses in most contexts.

Proof of this level could be discovered within the 2018 French decree defining the quotas for its territories and makes use of the phrases Traditionnel agricole and Traditionnel de sucrerie.

The English language model of Regulation (E.U.) 2019/787 states:

Within the case of geographical indications registered below this Regulation, the authorized title of rum could also be supplemented by:

• the time period ‘traditionnel’ or ‘tradicional’, supplied that the rum in query:
• has been produced by distillation at lower than 90 % vol., after alcoholic fermentation of alcohol-producing supplies originating completely from the place of manufacturing thought-about, and
• has a risky substances content material equal to or exceeding 225 grams per hectolitre of 100 % vol. alcohol, and
• just isn’t sweetened;

(ii)           the time period ‘agricultural’, supplied that the rum in query complies with the necessities below level (i) and has been produced completely by distillation after alcoholic fermentation of sugarcane juice. The time period ‘agricultural’ might solely be used within the case of a geographical indication of a French Abroad Division or the Autonomous Area of Madeira.

To briefly summarize the above, traditionnel rum should:

• Be obtained sugarcane-derived supplies completely from the place of manufacturing
• Distilled to lower than 90 p.c ABV
• Have risky substances of not less than 225 gr/hlAA.
• Not be sweetened

It’s essential to notice that the center two necessities (distillation energy and minimal risky content material) clearly differentiate traditionnel rum from “mild” rums distilled to close neutrality at increased energy.

2) The French Rum Market – Who Makes What?

It’s typically stated that the French transition to rhum agricole started within the Eighteen Eighties when Martinique planters discovered it unprofitable to export their sugar. Therefore, they began making rum instantly from cane juice. Whereas that is true, it understates how lengthy it took for agricole rum to overhaul molasses rum on Martinique. And on Guadeloupe, molasses rum nonetheless holds a slight lead over agricole.

Whereas agricole is what involves thoughts for most individuals once they consider French rum, the truth is that apart from Martinique, France’s three large-scale rum-making departments tilt in direction of molasses rum. This French authorities information from 2019 makes it fairly clear: [ii]

Be aware:   Be aware: The report doesn’t embrace information from Guyane (French Guiana), presumably as a result of its rum output is minuscule.

Briefly, La Réunion makes considerably extra rum than both Martinique or Guadeloupe, and 99.5 p.c of La Réunion’s rum is molasses-based. Martinique and Guadeloupe make roughly the identical quantity of rum. However whereas Martinique skews closely in direction of agricole rum, Guadeloupe makes roughly equal quantities of agricole and molasses rum.

It’s value noting that whereas a lot of the agricole rum goes into premium, distillery branded merchandise, a considerable quantity of the molasses rum goes is bought as bulk rum or goes into blends like Bardinet branded rum.

3) Quotas & Subsidies

Just a few world powers like France, the U.Okay., and the U.S. have sought to assist their former or present territories by giving them financial benefits in particular markets, e.g., the European Union. Within the case of France, it has lengthy had a diminished fee of excise taxes on rum from its abroad departments. What follows on this part is a really simplified overview of a really complicated matter.

France is a part of the E.U., and the E.U. dictates a set excise tax due for every liter of spirits (together with rum) made or imported right into a European Union nation. Nevertheless, with the E.U.’s approval, France can cost a decrease excise tax fee on a portion of the rum made in its abroad territories and bought within the French market. This implies a decrease tax invoice for French rum makers, giving them a value benefit within the French market—relative to non-French rums, which don’t get tax breaks.

Nevertheless, the tax reductions loved by French abroad producers are topic to quota limits and compliance with provisions laid down of their geographical indications and “Rhum traditionnel” definition. That’s, solely a predefined quantity of their exported receives a decrease excise tax fee. Something a rum producer exports to the E.U. over its quota restrict pays the complete excise tax fee. Since mainland France is the biggest importer of French abroad rum, the quotas are crucial to their rum makers.

Since 1995, the European Union has decreed an higher restrict on how a lot French abroad division rum receives the decrease excise tax fee. Each few years, the quota could also be adjusted.  At present, it’s set at 153,000 hectoliters of pure alcohol (PAH). That’s 15.3 million liters of alcohol at 95 p.c ABV. If it have been to all be diluted to 40% ABV for bottling in 700ml bottles, it could fill round 52 million bottles.

To obtain the decrease tax fee, the rum should meet minimal necessities for energy and risky substances; these are the identical ranges detailed of their geographical indications.

Every division has its personal share of the general E.U. quota. For instance, Martinique at the moment has round 45 p.c of the general 153,000 PAH quota (~68,800 PAH), whereas Guadeloupe has 35 p.c (53,500 PAH). Every division additional subdivides its quota allotment throughout its rum makers in very tough proportion to their total contribution to their territory’s output.

In 2018, new quotas values have been set out for all French abroad departments.[iii] The quotas for Martinique agricole distilleries have been distributed as follows:

The quota for Le Galion, Martinique’s solely molasses rum maker:

Guadeloupe’s agricole makers have the next quotas:

Guadeloupe has three quotas for molasses rum, comprising 67 p.c of Guadeloupe’s mixed quota:

Reunion has three quotas for molasses rum:

Whereas the quotas for every producer give a really crude thought in regards to the relative manufacturing of every distillery, they shouldn’t be relied on for any detailed comparisons of manufacturing output or capability. In the beginning, distilleries could make extra rum than their quota specifies. (Nevertheless, something they export to the E.U. in extra of the quota is topic to the common tax fee.) Additionally, it’s value noting that some French rums are exported exterior the E.U.

Inside a division, distilleries which are a part of the identical financial curiosity group can redistribute their quota between members. For instance, Saint James and Depaz are owned by the identical firm however have two quotas —one for every distillery. Thus, the corporate that owns them has the choice to reassign a portion of 1 distillery’s quota to the opposite.

The per-department quotas are additionally topic to intense lobbying and infighting. Every division naturally seeks the biggest share of the general “pie” divided up by the CIRT-DOM decision-makers. In recent times, Guadeloupe has made the case that Martinique receives a disproportionately massive share of the general quota allotment. Martinique’s producers disagree, naturally.

4) Rules – AOCs and G.I.s

Though Martinique’s appellation d’origine contrôlée (AOC) for rhum is arguably the best-known rum regulation, all French abroad rum-making departments have internationally acknowledged Geographical Indications.

The European Union has three completely different ranges of Geographical Indication. A Protected Designation of Origin (PDO) is probably the most restrictive and most difficult to acquire. One stage down is the Protected Geographical Indication (PGI).

Martinique’s AOC is a PDO, so on the top-tier. Nevertheless, Martinique additionally has a separate PGI for its molasses-based rum made on the Le Galion distillery (Rhum de la sucrerie de la Baie de Galion)

Guadeloupe has a PGI (Rhum de Guadeloupe), which is much less restrictive, permitting for each molasses and cane juice rums, and a broader vary of distillation equipment. Guyane additionally has a PGI for its rum (Rhum de la Guyane), as does La Réunion (Rhum de La Réunion).

In whole, France has seven rum geographical indications :

5) Organizations and Regulatory Businesses

The French are not any strangers to laws and regulatory our bodies. It’s useful to know a few of them to higher perceive the French Caribbean rum trade, so let’s assessment them.

On the native stage, CODERUM (Comité Martiniquais d’organisation et de défense du marché du rhum) represents the native rum producers of Martinique.

Martinique additionally has SDAORAM (Syndicat de Défense de l’Appellation d’Origine “Rhum Agricole Martinique”), which encompasses the agricole rum distilleries and the cane farmers that provide them. It’s 1992 inception was partly pushed by the will to lastly push the island’s AOC over the end line.

There’s additionally reportedly a CODERUM in Guadeloupe, though studies are that a lot of the island’s producers as an alternative belong to SRIG (Syndicat des rhumiers indépendants de Guadeloupe).

On the nationwide stage, CIRT-DOM (Conseil interprofessionnel du rhum traditionnel des départements d’outre-mer) oversees 4 points of the rum industries in all of France’s abroad departments: cane planters, sugar mills, rum makers, and buying and selling.

6) COFEPP (Compagnie Financière Européenne de Prises de Participation)

On the subject of French rum, one firm dominates the panorama: Compagnie Financière Européenne de Prises de Participation, mercifully often known as simply COFEPP.

COFEPP is France’s second-largest spirit firm behind Pernod-Ricard. Nevertheless, most individuals know of it through the merchandise of its subsidiaries: Bardinet and La Martiniquaise. COFEPP can be the bulk shareholder of Marie-Brizard.

COFEPP’s rum-related holdings comprise the biggest proportion of rum manufacturing on Martinique, Guadeloupe, and La Réunion. Actually, when COFEPP proposed to buy its competitor Quartier Français Spiritueux in 2011, the deal got here to the eye of the French Competitors Authority. [v] The deal was ultimately accredited, however COFEPP was required to dump sure property, together with Bellonie Bourdillon Successeurs (BBS), the father or mother firm of Martinique’s La Mauny distillery, now owned by Campari.

On Martinique, COFEPP owns the Saint-James and Depaz distilleries, in addition to sure points of the Le Galion sugar manufacturing unit and distillery.

On Guadeloupe, COFEPP owns three distilleries. SIS. Bonne Mère and Sucrerie Rhumerie de Marie-Galante, the 2 largest distilleries within the division, each making molasses rum. The third distillery is Bellevue Marie-Galante, a big agricole rum distillery. COFEPP can be a shareholder in Guadeloupe’s two sugar factories.

On La Réunion, COFEPP owns Rivière du Mât, probably France’s largest rum distillery, and definitely the biggest on La Réunion. It’s able to making round 9 million LAA yearly.

COFEPP’s rum portfolio contains Saint-James, Depaz, Dillon, Bally, Bellevue, Rivière du Mât, Negrita, Outdated Nick, and Galion. It additionally owns Aguacana, a cachaça model. The corporate’s non-rum portfolio contains Cutty Sark, Glen Moray, and quite a few different alcoholic beverage manufacturers.

Disclaimer

The knowledge above was collected from all kinds of sources. As a lot as attainable, it was cross-checked with different sources. Official authorities paperwork are the first supply, at any time when attainable. The information has been reviewed by French consultants within the rum discipline. Nonetheless, errors might exist. Please contact me for those who imagine one thing is inaccurate.

[i] The island of Marie Galante is legally a part of the division of Guadeloupe.

[ii] François-Xavier Deniau, et al,  Views de la filière canne-sucre-rhum-énergie en outre-mer, Inspection générale des Funds, 2021

[iii] Arrêté du 13 juin 2018 portant répartition entre les distilleries du contingent d’exportation de rhum traditionnel et relatif à la gestion de ce contingent NOR : MOMS1803753A

[iv] Whereas Gardel has a quota, it doesn’t distill rum. As a substitute, its molasses goes to SIS for distillation.

[v] Décision n° 11-DCC-187 du 13 décembre 2011 relative à la prise de contrôle exclusif de la société Quartier Français Spiritueux par la Compagnie Financière Européenne de Prise de Participation