Archive for the ‘Caribbean Islands’ Category

The plight of the sugar cane cutter

Monday, December 14th, 2015

The discussion about sugar cane workers in Nicaragua and the response from Nicaragua Sugar Estates Limited is highlighting Chronic Kidney Disease (CKD), a problem that has been identified in several countries across several industries associated with strenuous work particularly in tropical climates. If you think I’m writing this to exonerate anyone for the death of any human being stop reading this and crawl back into your dark, ignorant hole. Today, I am not employed by Flor de Caña or any of the affiliated companies that make this rum but they have earned my respect over many years.
I had the privilege of visiting Nicaragua and the Ingenio San Antonio sugar factory and the Compañía Licorera de Nicaragua distillery that makes Flor de Caña rum a few years ago after Skyy Spirits acquired the import rights to Flor de Caña for the US. Before traveling to Chichigalpa, Nicaragua, I was aware of kidney disease among cane cutters in that region, which at that time was being attributed by some journalists to insecticides used to control insects. To say I was concerned about this issue, and my involvement as a consultant to the importer of a rum company that was being accused of poisoning their workers, is an understatement. During my visit I asked about insecticides and was told the use insecticide use had been reduced after planting eucalyptus trees around the sugar cane fields which provided a habitat for birds of prey that control rats and other pests that attract the sugar cane harvest.
A couple of decades ago burning cane was a common practice that drove poisonous snakes from the cane fields. Burning also makes it easier for workers to cut the cane by eliminating the sharp, serrated leaves that cut worse than paper. Every year less and less cane is burned around the world. The environmental impact of burning cane is terrible as the dense, thick smoke blows for miles through dwellings adjacent to the fields. At times the smoke can be so thick visibility is reduced and airports miles from the fields are forced to close. As an alternative to burning, more and more sugar cane around the world is cut by massive machines that have a couple of advantages. Machines are more reliable than men toiling in the tropical heat and the fields don’t have to be burned (though they still are in many places).
I saw some sugar cane cutting machines in the maintenance yard next to the sugar mill and asked how much sugar cane was being machine cut. Nicaragua is the second poorest country in the Western Hemisphere and labor is cheap in this country of six million people. Following the trend of using more machines to cut more cane could have drastic effects on those who depend on the sugar cane harvest as their primary means of support. I was told that the sugar estate will continue to employ as many cane cutters as want to work. Under ideal conditions machines can replace as many as one hundred men. The heavy machines can’t operate in steep hills or muddy fields, so there will always be some demand for manual cane cutters. I also learned that all of the cane cutting was done by contractors but that cane cutters in Chichigalpa make more money than those in adjacent Central American countries. Competition for jobs and the fact that these workers are concentrated in Chichigalpa as opposed to being migrant workers may account for some of the higher CKD rates in this area. In many other places, cane cutters travel many miles to work in the fields and aren’t counted in their communities if they get sick and can’t work or even die. Is this scientific proof that this disease isn’t actually more concentrated in Chichigalpa? Of course not, but it is a fact that may skew the statistics viewed by the casual observer.
Today, I’m surprised that many medical researchers agree that they don’t know as much about the causes or prevention of chronic kidney failure that is affecting agricultural workers, miners, dock workers and other laborers around the world as we might assume them to know in 2015. It is generally agreed, however, that more fresh water for hydration and more rest breaks in the shade, two things that will help reduce the body’s core temperature can significantly reduce the occurrence of CKD.
Can more be done for the plight of the cane cutters in Nicaragua? Absolutely! In September, Bacardi was called out for their involvement in buying distillate produced from sugar cane cut by workers who are also affected by the harsh conditions in the cane fields as reported by Fair The tide is turning and more people every day are becoming aware of this problem and more resources are being committed to the health of the workers in Central America but the problem of CKD is affecting more than sugar cane cutters in Nicaragua.
A few times during my trip to Nicaragua, I felt like I was getting the corporate banner waved in my face, or maybe I was just being my cynical self, but I listened and learned more than I thought I would. Grupo Pellas, the parent company of Nicaragua Sugar Estates Limited, Ingenio San Antonio (the sugar mill that processes the cane) and Compañía Licorera de Nicaragua (the distillery that makes Flor de Caña Rum) is committed to the improved welfare of the country. My skepticism about this corporate giant in a country that was endured years of war and an earthquake in 1972 that leveled Managua, the capital city, was tempered when I saw the modern, high-pressure, super-heated boiler and generator in a warehouse near the sugar mill. During the cane season, roughly the first half of the year, the spent cane was burned to produce 23% of Nicaragua’s electricity. The rest of the year, eucalyptus, harvested by men who cut sugar cane during the cane season and who would be otherwise unemployed, fueled the high-efficiency boilers to produce 17% of the country’s electricity.
Another surprising revelation was that spent yeast from the distillery was used as feed stock for the million-gallon anaerobic digesters that convert the nutrient-rich distillery effluent to methane that is used to generate all of the energy used in the distillery and bottling plant. And instead of only producing raw sugar to be sold as pawn chips in the international sugar market, more ethanol was being produced to further reduce Nicaragua’s dependence on foreign oil.
A more subtle suggestion that these companies care about the environment and their future was the rum bottle itself. A more efficient shape than the round bottle used by almost every other spirit company. Square bottles fit into smaller boxes which saves a piece of cardboard a bit bigger than a postcard but multiplied by four million cases a years added up to a few box cars of imported cardboard. Since my visit, Flor de Caña introduced a new bottle which is less efficient, hopefully they will revert back to the more efficient bottle but that’s another story.
Over dinner and the ubiquitous rum and Coke, made with sugar not hfcs, I asked one of the engineers how he was able to convince the company to invest millions of dollars in what seemed like luxuries in this poor country. The answer reminded me of language attributed to Henry Ford. I don’t remember the exact words but it went something like this: By reducing our dependence on foreign oil we can help the stability of our country. By selling electricity to the government grid at just above our cost, we can help every citizen of this country. As the standard of living in Nicaragua improves and people use more electricity we will not be able to continue to provide as much of the electricity demand as we do today, but we will continue do our part to build this country.
Every sugar mill sells molasses to more than one distillery, just as almost every distillery buys molasses from more than one source (only distilleries like this one which are aligned with a sugar mill that produces more molasses than they can use are the exceptions). Likewise, every distillery sells alcohol to more than one customer after they satisfy their own needs. Ingenio San Antonio is no different. Compañía Licorera de Nicaragua is Ingenio San Antonio’s biggest and most important customer but it is by no means their only customer. There are a handful of rums blended from rum from this distillery, but in deference to the blenders and brand owners I’ll let them tell you where they source their raw materials. On the other hand, if I published everything l’ve learned over the past twenty years I would lose the trust of many of the people who have been instrumental in my education in this industry. As I wrote in 1995, there’s a bit of magic in every bottle of rum. If I told you everything, it would no longer be magic. While I take every opportunity to be transparent in regards to every bottle of rum I sell through my import company, I will not take that liberty with every other sugar cane product on the shelf.
Growing and harvesting sugar cane is hard work and one of the reasons that since 2000 there has been no sugar being produced in Puerto Rico, St Kitts and Trinidad. Other Caribbean islands like Antigua, Dominica, St Vincent got out of the sugar business years ago as the economy of scale favored the larger estates in Central and South America.
Cane cutters in most countries are paid by the weight of the cane they cut. Laborers work as hard as they can to make as much money as they can during the cane season. Workers paid by the hour can afford be more concerned with getting enough hydration, rest and staying healthy. In Martinique, for example, a cane cutter can earn more than $2,000/month plus health and retirement benefits as well as having some stability in their lives. But before you think that is a good money I will tell you that I have cut sugar cane in the fields in Grenada while I was researching my first book. I didn’t arrive in the field at sunrise like the rest of the crew but after my breakfast and morning coffee. The crew I was working with were paid about $2/ton of cut cane. We took a few breaks under the mango trees along the road next to the cane field but the fruit wasn’t yet ripe. We quit cutting before 1pm, stopped for lunch and then spent another hour or so stacking the cane into piles to be picked up by a tractor that hauled our harvest to the mill. I would have made enough money for a couple of beers and some food, but wouldn’t have been able to sustain myself on what I made in the field on that relatively nice cloudy day. I also had an advantage over my crew. I brought a few new files that I used to sharpen the blades we used and the time I spent sharpening blades in the shade wasn’t spent cutting cane in the sun.
The reality and truth of this and other work related health issues is that some of us, even in what we call civilized societies, do things that endanger our well being lives. And even if we don’t endanger our own lives we support businesses that endanger the lives of others. As I write this on Sunday afternoon, how many athletes will risk career- or life-ending injuries on the American football field today? The first difference is that many of these athletes are paid more for this day’s performance than the rest of us will make in years and more than most sugar cane cutters will earn in many lifetimes.
How many small American corn farmers that have been bankrupt by the makers of gmo seeds and how has that affected the whiskey you drink. What are the working and environmental conditions in the factory where your phone or computer was made? Yes, these are rhetorical questions.
Before I set sail for the Caribbean, my last job was on an oil, actually gas-drilling, rig in Papua New Guinea. I later learned that it is much less expensive to insure an oil drilling operation than a deep-depth gas exploration drilling rig in the remote jungle. This was the third exploration well in what is now one of the biggest natural gas production fields in Asia. To get to the rig site we flew a chartered, fixed wing aircraft from Port Moresby to Hari, a remote, mountain village that had little more than an air strip and a few huts. From there, we flew in a helicopter to the first exploration well site, marked by a helicopter crash where all of the crew and passengers had died. From there, the pilot took a course over a mountain ridge to the second exploration well site, also marked by a helicopter crash that also took the lives of all on board. Even if we survived the helicopter flights in the rugged mountainous terrain we could only hope that nothing would go wrong as the rig drilled day and night to depths of more than three miles into the earth. I left the oil, or rather gas, fields because I knew I could survive doing something else. I didn’t for a moment think I’d end up in the rum business, but I was open to anything that didn’t involve the possibility of my fiery death as the result of circumstances beyond my control. Many of the friends I made in those places didn’t have the options I had, some perished within a few months of my departure.
When the Deepwater Horizon oil rig burned in the Gulf of Mexico after a blowout due to a faulty cement job and a rushed schedule that can only be explained by corporate cost cutting, eleven lives were lost. There was predictable, justifiable condemnation of the events that led to those deaths and the environmental damage that followed. Every conscious person was outraged, but who among us quit driving a car in response to that event.
Certainly, to date, the response from Nicaragua Sugar Estates Limited sounds a bit corporate, like GM’s response to their ignition switch problem, or gun manufacturer’s response to mass shootings. If you don’t know it by now let me tell you that this is what corporations do. But, the ball has begun to roll and is gaining speed. Research dollars are being spent and the workers are getting some of the relief they so desperately need. Unfortunately those dollars won’t help those who have died or been disabled by this disease. I am encouraged that research has also been initiated into possible environmental or hereditary conditions that might predispose populations to this condition.
Here’s a link to a new website that outlines what is being done by Ingenio San Antonio as well other information I found interesting and informative about the causes and treatment of Chronic Kidney Disease.
By next year’s harvest, hundreds of cane cutter’s jobs in Nicaragua could be eliminated by buying a couple of cane cutting machines. Is this a solution to the CKD problem in Nicaragua? I, for one, don’t think so. For my part, I’m going to continue to ask questions and listen for the answers. International attention has been drawn to this issue, but I’m not going to condemn a company that is committed to raising the standard of living in Nicaragua. There are a lot of proposals on the table and some may actually be completed.
The Pellas family emigrated from Italy to Nicaragua in the last decades of the nineteenth century and have been citizens of Nicaragua for more than a century. This is not a multinational, corporation that is exploiting everything and everyone in their path. They have built an enviable business under very difficult conditions over many years and from my experience are more proactive toward improving the environmental and social impacts of their business than many others in the industry. Is there a lot more work to be done? Absolutely, but I also wish there were more companies like this one in the spirits industry.

Edward Hamilton
Dec 13, 2015

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Rum Cover Over Tax

Sunday, March 3rd, 2013

Nearly one hundred years ago the US Congress initiated what has become to be commonly known as the Rum Cover Over tax. Without knowing anything about rum, the reader should understand that something is being covered over and the word tax should tell you that it involves money. If you drink rum in the US, it’s your money.

For the last 80 years or so, no one really talked much about this line in the congressional archives that gave money back to the US Virgin Islands according to the federal tax that was paid in the form of Federal Excise Tax on sugar cane spirits imports from that Caribbean territory.

Currently the Federal Excise Tax, or FET as it is known in the industry, on a 750ml bottle of alcoholic beverages at 80 proof, the standard bottle you’ll find on a liquor store or bar shelf is or 40% alcohol is $2.17. One liter and 1.75 liter bottles are taxed $2.89 and $5.06 respectively. Back in 1917, the US government agreed to give back to the US Virgin Island general fund, most of that tax, which was smaller in those days. Since the money came back to the USVI general fund, it could be used for whatever purpose the local governor thought best served his islands.

About 1957, Puerto Rico appealed to the fine folks in Washington for the same deal. And they confirmed what fine folks they are, by giving Puerto Rico the same benefits that their windward neighbors had been enjoying the previous 40 years. Bacardi was in the process of gearing up production in Puerto Rico and it wan’t long before the tax on that rum sold in the US brought considerable dollars back to the island. The Puerto Rican government recognized that by passing on some of the money that Bacardi and other distilleries on the island were generating to the distillers themselves in the form of marketing assistance that even more money would come south from Washington, D.C. And it did.

The rest of the tax money would go to the Puerto Rican general fund and go to build schools and buy lavish houses and yachts for those elected to disperse that money from the general coffers. In the Virgin Islands, the story is similar but names of the people and companies involved differ.

And then came Diageo. No. That isn’t exactly true. Diageo had been buying rum from Serralles since the late 20th century for their Captain Morgan brand rum after they acquired that brand from Allied Domencq. Historically, Diageo didn’t own their rum distilleries as Seagrams had in the last century. But as the Captain Morgan and other brands grew, Diageo began searching for a place to build a modern rum distillery. They were already buying rum from Venezuela – Pampero and Cacique, and Guatemala – Zacapa, but they wanted to build a distillery so they could more closely manage their production costs in a stable political environment. The decision of where to build was also influenced by the value of the concessions afforded them by the host country. Being a British company and since the British Virgin Islands are too small to accommodate a project of this size, Diageo went to the US Virgin Islands began the conversation about building on St Croix.

Rum production on St Croix dates back centuries, almost to the introduction of sugar cane to the Caribbean by Christopher Columbus to what he called the West Indies in 1493. Well, Chris, didn’t actually carry the sugar cane with his own hands, he was too busy for that, but he was the guy that got the Queen of Spain to finance his trip after successfully returning from a shakedown cruise the previous year. Sugar cane, was one of the plants he brought which he claimed he would use to start a new Spanish colony in the New World. Closer to the truth was that starting a Spanish colony would give the conquistadors a base from which to explore, or more accurately exploit, the riches of the New World.

By the 18th century, St Croix was a patchwork of sugar cane fields. Even today you can see the remains of sugar mills and distilleries from almost anywhere on the largest of the US Virgin Islands. Lacking a protected port like Charlotte Amalie on St Thomas, St Croix didn’t develop as the trading center but rather the agricultural center of the Virgin Islands.

In the last century only two distilleries remained until hurricane Hugo destroyed the Brugal distillery in 1989. Since that time the Cruzan distillery has grown through a number of acquisitions and takeovers as international companies recognized the quality of the rum produced and aged on St Croix. Everything changed a few years ago when the US Virgin Islands governor made a deal with Diageo to build a distillery not too far from Cruzan. But there was going to be a big difference, Diageo would get back half of the rum cover over tax money that it generated. Governments giving industries incentives to invest in their region is nothing new, but in this deal, Diageo would get back more than their cost of production for any sugar cane spirit sold in the US and thence taxed by Uncle Sam, their new favorite uncle.

And there was more, St Croix would help finance the construction of the distillery through bonds guaranteed by the money that would be generated by the new distillery. A match made in political heaven. Not many businesses get back more than their cost of production even before they get paid for their product.

Five hundred years after the Spanish sailed by what are now the Virgin Islands because they didn’t see the golden treasure they were looking for, it seems Diageo has found more than gold.

As you might expect, Puerto Rican rum producers cried foul because by their laws only a small percentage, less than 20% of the rum cover tax received by the Puerto Rican island government could go to the rum producers themselves. Another percentage would go to Rums of Puerto Rico, that promotes all of the rums from that island.

The owners of the Cruzan distillery also felt a bit slighted but were able to negotiate some low cost loans to they could modernize their facility and compete a bit more fairly with their new neighbor. Unlike Diageo, Cruzan depends on aging their rum, a process that ties up a lot of money and resources. But like Diageo, Serralles and Bacardi, Cruzan also sells a fair bit of fresh bulk rum to blenders and bottlers that use it for a myriad of products some of which don’t even have the word rum on the label.

But don’t think for a minute that this is just a local controversy between a couple of neighboring islands over an estimated $30 billion over the next 25 or so years. Almost every rum producer in the Caribbean has cried foul claiming Diageo and other US Caribbean rum producers are enjoying unfair advantages in what is supposed to be free and level market.

Most of the those people have forgotten the $5 million euros the EU spent a few years ago to promote Caribbean rum. But even if Diageo had orchestrated that promotion and paid the entire bill itself, it would have paled in comparison to this deal. There have been rumblings of misconduct by Congressmen, but that’s mostly died down as business as usual as there were more important issues during the last US presidential election. And there has been talk about a suit against the US in the World court. Who will finance such a court battle is yet to be seen. Every rum producer and rum producing country has their own interest and though unity is probably the only way such a challenge could succeed, the reality just isn’t that simple.

The Dominican Republic rum producers claim to be harmed by the Diageo rum cover over tax deal. The reality is that only rum sold for consumption in the US is subject to the rebates. And much of the rum produced on the Dominican Republic, less than 100 miles downwind from Puerto Rico, is distilled on Trinidad or Panama and then blended and bottled in a free trade zone on the south coast of the DR. The next time you pick up a bottle of rum, look for the country of origin of the rum, not just the country where the rum was produced.

The Dominican Republic government receives a lot of aid from Uncle Sam and many influential Americans including the Clintons vacation on the south coast of the DR. Although the blended and bottled rum market is important to the DR for employment, there are little to no alcohol tax paid in that country since the bottling industry operates in a free trade zone and most of those products are not sold on that island.

Historically, the West Indian Rum and Spirits Producers have failed to cooperate as a group to do much of anything. In 2000, they agreed not to adopt any best practices for their industry, so it seems unlikely that they will be capable of uniting on something even this important to them. In the bigger picture, this as an opportunity to differentiate between the rum that is being distilled and bottled by Diageo and that which has decades, if not centuries, of tradition. Certainly the Caribbean rum producers on Barbados, Trinidad, Panama, Jamaica, Antigua, St Lucia and others are justified in feeling that they are at a disadvantage, but they have so much more to sell in terms of authenticity and heritage if they wanted to be more transparent. It should be noted that the tax advantage is greatest for a company that is selling the cheapest, freshest rum. The price of an older, more expensive rum isn’t affected by the cover over tax nearly as much as a young, cheap rum. And as the rum market expands, imbibers are looking for better products with less regard to what even Diageo admits is a high fructose corn, flavored, sugar cane spirit.

There is a lot of uncertainty in the future of this controversy. (Don’t get me started on the corn subsidies that are destroying the health of livestock and the American population. Please). But there is one indisputable fact that is as clear as the words on this page. When everything thing is said and done, there will have been a lot more said than done.

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Aug 16 is National Rum Day

Monday, August 15th, 2011

There are a few things we have as Americans that only a few other citizens of the world can claim as their own. I’m not writing about redundant, dysfunctional government officials, or over-taxed citizens but that not-so-famous, not-yet-holiday known as National Rum Day. This year, the speculation continues to swirl on the blogosphere about the origins of this iconic day in our lives so I’ll throw my two cents in the ring and state for the record that National Rum Day was started as a marketing campaign for a Caribbean Rum by a talented, not-quite-on-Madison Avenue PR company.

Over the weekend I have been sent numerous links to articles about National Rum Day by writers and publicists. The last of these National Rum Day articles made it painfully clear that I needed to get to work.

Before you read any further, take a moment and try to name ten different rums and the countries from which they come. Got it? Now read on.

In no particular order, here’s a short list of rums to look for in anticipation of National Rum Day. I’m writing about these rums because by the time National Rum Day comes around next year, you may not be able to find them and you certainly don’t want to miss out on these rums.

Bacardi is the best known, and best selling, rum in the world. Originally from Cuba, today’s Bacardi rums have evolved since the family fled that four-letter island and are produced around the world. Change can be good, but like their Añejo, that used to be one of my favorites when it was produced in Puerto Rico, not all changes are necessarily regarded as better by the wider audience. Another Bacardi product is going to change so here’s some news you can use. Bacardi 8, sometimes erroneously called Bacardi 8-year-old, is going to change, if not go away entirely. The distillery where this rum was made was shut down a couple of years ago, but there’s still some Bacardi 8 to be found. When you find a bottle, look on the back label for the words, ‘Product of the Bahamas.’ That’s the one you are looking for. Good enough to sip, cheap enough to mix, Bacardi 8 will have your friends asking where you found that rum.

Variety is the spice of life and there are no more diverse spirits than those made from sugar cane. Flor de Caña has been making a variety of rums for more than a hundred years. From the crisp, tropical fruit and coconut notes found in their clear 4-year-old white rum to the dry, roasted nut and smoky oak finish of their 19-year-old rum, there is something for every taste in their offerings. But nothing lasts forever and Flor de Caña 5-year-old is going to be hard to find in some markets, particularly in North America. But don’t despair if you can’t find any Flor de Caña 5-year-old, reach for the 7-year-old and you’ll be glad you did.

Another suggestion for National Rum Day, and this one isn’t going away, is Santa Teresa Claro, the rum of the month for August, 2011. About as close as you will come to the old Havana Club three-year-old rum for which Havana Club is famous, Claro has a slight tint since it isn’t fully carbon-filtered as aging at least two years. Venezuela has one of the longest minimum ages for bottled rum in the industry. Can you name two other islands with minimum ages for bottled rum? There are a lot of recipes for daiquiris and Claro and Flor de Caña 4-year-old white bring unique qualities to this drink.

Another rum that’s going to go away, though it was hardly known by even many of those who sold it, comes, or came, from Barbados. Mount Gay Sugar Cane Rum, also bottled as Mount Gay Sugar Cane Brandy on Barbados was arguably, the best rum from Mount Gay. Mount Gay Extra Old Barbados Rum has been one of my favorites since I first tasted it in 1994, but their Sugar Cane Rum was only a couple of bucks more than their least expensive Refined Eclipse. In August of each year, Crop Over on Barbados is the annual celebration of the bounty of the island. Since this is the closest of the island celebrations to National Rum Day, it could have been, just might have been, someone working on the Mount Gay account that first coined this National Day, but like the secrets in every bottle of rum, some secrets are best when they remain secrets.

Other secrets should be shared, like how to best enjoy these and other rums. It is almost impossible to miss if you mix one of these fruit juices with rum and a bit of lime. Depending on your taste I suggest guava, pineapple, coconut water or those old standbys orange or grapefruit juice. If you buy your juice, make sure you are buying juice and not fruit drink. Look for 100% fruit juice in the label ingredients and not high-fructose corn syrup mixed with some fruit flavoring. Ginger Beer or high quality Ginger Ale is also one of my go to mixers that is sure to please.

If you’re more talented, or think you are, take a look at the recipes on this site and you’ll certainly get some inspiration. Experiment a little and you’ll be rewarded for your efforts. Substitutions are acceptable, but remember that the person that makes those great drinks for you at the best bars in the country has spent months, if not years, perfecting the drink they are serving you. Practice makes perfect.

What will I be drinking on National Rum Day? It’s a good bet that I’ll start with a ti punch and then move on to something with fruit juice in it and then I’ll probably end the night with something that has spent a decade or more in an oak barrel silently maturing in the tropics either with a couple of chips of ice or mixed in an old fashioned.

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Back from the islands

Tuesday, January 16th, 2007

I returned to a chilly Chicago last night from the sunny island of Culebra, Puerto Rico. A month in the islands is never enough. In the coming days I’ll post more about that trip. One of the highlights was passing within about 4 miles of Montserrat on Jan 8 as a small eruption was in progress. Montserrat Jan 8, 2007

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