French company acquires stake in National Rums
Goddard Enterprises Limited of Barbados has exited its investment in National Rums Jamaica Limited (NRJ) under a wider deal worth nearly US$13 million that hands ownership to a French company called United Caribbean Rum Limited.
It's the latest European spirits outfit taking a stake in a Caribbean rum operation.
Chief executive officer of National Rums Jamaica, Winston Harrison, told Gleaner Business that while the deal was announced in Barbados last week, it still requires approval by regulators in that territory. As such, he declined to comment immediately on its implications, at least until internal discussions are completed.
"A full response will be forthcoming following discussions with the potential new co-owners. We would like to complete internal discussions first before issuing a statement on the matter," said Harrison.
Last Friday, a market filing on the Barbados Stock Exchange (BSE) indicated that Goddard Enterprises had sold its stake in West Indies Rum Distillery Limited (WIRD) to United Caribbean for over BDS$10.22 per share, valuing the transaction at BDS$25.76 million or US$12.88 million.
The sale amounted to 92 per cent of WIRD's equity and was priced at a 28 per cent premium, based on BSE data. It included Goddard's share of National Rums.
Harrison told Gleaner Business that prior to last week, the shareholders in NRJ comprised Goddard, 33 per cent; Demerara Distilleries of Guyana, 33 per cent; and Sugar Company Jamaica Holding, a subsidiary of the Government of Jamaica, owns the other third.
Goddard, however, in its newly released 2016 annual report, put its stake in NRJ at 31 per cent. The regional conglomerate indicated that subsequent to its September 2016 year end, it signed an agreement to dispose of its shares in West Indies Rum Distillery, and that the transaction would include its minority stake in NRJ.
United Caribbean Rum is a Barbados holding company and a wholly owned subsidiary of Compagnie de Bonbonnet SAS, a privately held French holding company, according to the statement on the share purchase obtained by Gleaner Business.
VAST SPIRITS BUSINESS
Bonbonnet, which owns a number of subsidiaries, including Cognac Ferrand, operates a vast spirits business, which includes the sale and production of gins, vodkas, rums and cognacs.
Caribbean rum exports are forecast to grow in the medium term, in contrast to a global flattening of activity, according to joint research from Just-Drinks and The IWSR, laid out in the Global Rum Insights report.
Jamaica's rum producers exported US$37.3 million worth of rum between January and November 2016, compared with US$35.5 million in the same period in 2015, according to Statistical Institute of Jamaica data.
National Rums itself is said to have racked up sales of about $2 billion last year, which translates to around US$15 million. Its assets include distilleries in Clarendon and Long Pond, Trelawny, as well as rum brand Monymusk.
While the Caribbean and Jamaica sales are expected to grow, the rum insights report forecasts a compounded annual decline, globally, of 0.5 per cent between 2016 and 2021, representing a reduction of nearly 3.7 million cases of rum.
Jamaica's largest rum operation, J. Wray & Nephew, is also European-owned by Gruppo Campari.