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Editorial: Let’s have a Red Stripe

Published:Friday | February 19, 2016 | 2:00 AM

With the likes of Usain Bolt, Blue Mountain Coffee and Appleton Rum, Red Stripe Beer is among the most iconic of Jamaican brands, which is only partly why the repatriation of a substantial chunk of its production is a big deal. There, is too, the economics of the decision.

Red Stripe, a premium lager, has been brewed for more than three-quarters of a century, initially by a company owned by two famous Jamaican families, the Desnoeses and Geddeses. It is now owned by the Dutch brewers Heineken, which recently bought the business from the British food and drinks company, Diageo.

This week, the owners announced that Red Stripe for the American market, which, over the past three years, has been brewed under licence by a firm in Pennsylvania, would now be manufactured here. Several things are significant about this.

One is that the major reason why Diageo had sent the production offshore was to enhance the competitiveness of the beer in the US market. It wasn't economic to brew it here and ship it to the United States. This reversal means that production at the Jamaican brewery will increase by around 30 per cent, or approximately 2.5 million cases of Red Stripe. That will mean direct employment at the brewery for scores of people, plus the creation of hundreds of indirect jobs.

Not only is this development is good for the economy beyond its immediate impact of more jobs. There, too, is its demonstration effect to domestic entrepreneurs and potential foreign investors. This raises the issue of why Heineken/Red Stripe has taken this decision.

Said Red Stripe's chairman, Richard Byles: "Jamaica is a more competitive country today on the world market than it was three years ago." The country has, in that time, undertaken tough macroeconomic reforms, leading to a more business-friendly environment. There is, however, much more to be accomplished on this front, which means more tough decisions to be taken.

Red Stripe's owners, too, have taken initiatives to improve their own productivity - like the J$1.7-billion investment in a new brewing facility, plus the innovation of using domestically grown cassava as a starch substitute for imported barley, a decision that should give a sense of vindication to Christopher Tufton for the ridicule he endured when, as agriculture minister, he proposed Jamaica's return to large-scale growing of the tuber.

If Jamaica goes all the way with its economic reforms, the country will probably have less to fear that the Appleton rums, now owned by the Italian firm, Campari, will head offshore. Indeed, if the country had been doing the right things decades ago, a brand like Tia Maria, the coffee liqueur, might still have been resident here, and there would have been far less decimation of other sectors of the economy.