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Rum production up, exports down

Published:Wednesday | June 4, 2014 | 12:00 AM

Richard Browne, Business Reporter

Jamaica's rum exports declined in 2013, even while production increased, according to the latest figures from the Economic and Social Survey of Jamaica, produced by the Planning Institute of Jamaica (PIOJ).

Rum exports fell by more than 13 per cent, while alcohol production increased by 11 per cent.

The development is an indication that rum producers are moving up the value chain to create more premium products, said sector representatives.

When you have a decline in exports and an increase in production, it means "people are putting away rum for ageing," Lloyd Forbes, director for the Spirits Pool Association, told Wednesday Business.

The move is an indication that leading rum producer J. Wray & Nephew is "geared towards a longer-term view" now that it has been taken over by Italian spirits producer Campari, Forbes said.

"They have to put away larger stocks," he said.

The difference in price between a young rum and a more aged rum can be significant. Currently, a 750-litre bottle of Appleton Special at Sampars Cash and Carry retails in the region of about $1,400 including tax, while a similar bottle of Appleton V/X sells for about $1,800.

But a bottle of Appleton Estate 21-year-old at source at the gift shop at Appleton Estate in St Elizabeth currently sells for US$132 (J$14,300), while a rare bottle of Appleton 50-year-old retails for US$5,000 (J$540,000).

13.4 per cent decline

Jamaican rum exports were valued at US$48.18 million last year as opposed to US$55.65 million in 2012, the PIOJ report said. That represents a fall of 13.4 per cent.

Total output of alcoholic beverages, including rum, was 25.239 million litres, up from 22.747 million in 2012 - an increase of 11 per cent.

The increase "stemmed from greater demand as there were fewer factories operating during 2013," said PIOJ. "One of the four plants was closed throughout 2013 due to waste management challenges, while another plant was closed for September to December 2013 to facilitate maintenance activities."

The export of other alcoholic beverages fared even worse than rum. Total exports dropped to US$23.4 million, compared to US$38.8 million in 2012. That was a fall of more than US$15 million or 39.6 per cent.

But this too is natural, as Jamaica produces rum at a better rate than other spirit such as gin and vodka or ethanol - for example, "a litre of rum is more valuable than a gallon of ethanol," Forbes said.

It is better to import those spirits, and "use the capacity to make rum," he adds.

As it stands, Jamaica doesn't currently produce enough molasses to supply its rum industry, and has to import about 50 per cent of its needs, Forbes said. Supply markets for molasses include Mexico, the Dominican Republic and Costa Rica, but the input is also sourced as far away as Fiji.

But imported molasses can affect the flavour of local rums, so care has to be taken ensure the foreign-sourced input does not affect quality.

"Pot still rums are critical," Forbes said, and producers take care to use local molasses as much as possible. While there is a science to rum production, there is still a lot of tradition involved, he said.

Beer and stout production fell to 41.868 million litres last year - the lowest level in more than five years - from 50.226 million litres in 2012.

PIOJ said the decline in beer production - which fell by 26.6 per cent to 28.138 million litres - stemmed from a fall in demand.

Stout production, however, climbed up 15.7 per cent to 13.730 million litres - led by a resurgence for Dragon Stout.

"We have been seeing increased demand for stouts primarily Dragon which has grown year-on-year approximately 30 per cent," Dianne Ashton- Smith, head of corporate relations for Red Stripe Jamaica. Guinness saw a slight decline of approximately one per cent, she said.