‘Never Made in Cuba’: Pernod Ricard Attempts to Shut Down Bacardi’s Havana Club Advertising, Challenge Headed to Federal Trade Commission
Pernod Ricard and Bacardi continue to legally spare over the ownership and rights surrounding Havana Club Rum. This month the National Advertising Division escalated Pernod Ricard’s challenge against Bacardi to the Federal Trade Commission (FTC). The challenge claims Bacardi is misleading customers about its Havana Club’s connection to Cuba.
These two titans of the spirits world have been at odds with each other over the Havana Club brand for decades. In the 1990s Pernod Ricard set up a joint venture with Corporacion Cuba Ron to export Cuban Havana Club which is produced by Havana Club Intentional S.A. in Cuba. This occurred after Cuba lost one of its major importers when the Soviet Union collapsed.
Bacardi also claims rights to the Havana Club rum brand which is produced in Puerto Rico. This version comes from members of the Arechabala who fled Cuba, according to the narrative surrounding Bacardi’s Havana Club. Jose Arechabala, S.A. (JASA), who made Havana Club in Cuba, was privately owned by members of the Arechabala family prior to its seizure by the Cuban government.
Bacardi purchased the Arechabala family’s rights to the “Havana Club” trademark after a 1996 lawsuit was filed against the company.
The conflict between these two brands partially stems from the U.S. embargo on Cuba. This has allowed the two versions of Havana Club to exist simultaneously. Bacardi sells its version in the U.S. and a few other countries. While Penold Ricard has a wider distribution of over 120 countries. This situation has frequently placed the two major spirits companies in court.
In Pernod Ricard’s challenge, the company argues that Bacardi’s use of the name “Havana Club” and references to Cuba on the label misleads consumers about the origins of the rum since the rum is made in Puerto Rico. The challenge further claims that the Puerto Rican version of Havana Club is a completely different recipe and was “never made in Cuba.”
Bacardi requested the challenge be closed because the courts already made a decision relating to claims made by Pernod Ricard. In 2007, a Delaware Court dismissed Pernod Ricard’s case because the company failed to adequately show how Bacardi was damaging the sales of its version of Havana Club. This decision was upheld in 2011 by the 3rd Circuit Court of Appeals. A major factor being that the two companies do not both sell in the U.S.
The NAD disagreed with Bacardi’s request. Rather, it stated that the trademark litigations are not the same as the challenge being made. Furthermore, since the court’s decision Bacardi has begun including the origin story of Havana Club rum and has included additional references to Cuba.
NAD notified Bacardi of its decision and stated it would not participate in the NAD self-regulatory process. Although, Bacardi agreed to discontinue the bottle neck hang tags which read “Forever Cuban” and “From: Cuba” and revise all in-store promotional material. The NAD maintained that these actions do not address all the claims made by Pernod Ricard.
“[It] was disappointed that Bacardi chose not to participate in the self-regulatory process with respect to the claims challenged by Pernod Ricard,” stated the NAD.
The NAD determined it would refer this challenge to regulatory authorities.
Recent bipartisan legislation has signaled the potential end to the Cuban embargo which could lead to Cuban Havana Club returning to the U.S. market. However, a seemingly competing bill also put forward could possibly prevent any brands seized by the Cuban government from being allowed to export to the U.S. Havana Club was used as an example of one of the brands which would be disallowed in statements released by the U.S. representatives.
The fight between Pernod Ricard and Bacardi is decades old. A solution seems unlikely until the background complexities of Cuban-U.S. relations are resolved. An FTC decision could prevent Bacardi from overly referencing Cuba in its branding, but it is unlikely to completely shut down the Havana Club brand.
US Senators Introduce Bipartisan Bill to End the Trade Embargo With Cuba, Potentially Opening Door for Cuban Rum to Return to US
Senators Introduce Bill That Could Prevent Cuban Havana Club Rum From Ever Entering US Market
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