Bacardi Turns 150, Reflects On Communist Cuba Nationalization Of Its Assets

Bacardi Turns 150, Reflects On Communist Cuba Nationalization Of Its Assets
Posted On: October 19, 2012 - 2:47pm

In its 150th anniversary yearlong celebration, Bacardi celebrates its
tremendous success as the world's largest privately-held spirits company
and the incredible drive and perseverance it took to get there following
the illegal confiscation of its assets in Cuba on October 15, 1960 – 52
years ago.

It event was an extraordinary event, after nearly 100 years of being in
Cuba, but it enabled the family-owned Company and its namesake BACARDÍ®
rum to become an international brand, while Cuba remained stuck in 1960.
Within 20 years following the nationalization of the company's assets by
Cuban communists, BACARDÍ rum became the number-one premium distilled
spirits brand in the United States. Less than a year after that, it was
the number-one selling spirit brand in the world.

From humble beginnings in Santiago de Cuba in 1862, Bacardi – the
family, Company and brand – succeeded despite tremendous personal and
political upheaval in its first 100 years including war, bankruptcy and
prohibition. In 1910 it became Cuba's first multinational company

The threats by Fulgencio Batista's government during the 1940s-50s,
which included his decision to nationalize Bacardi for one day,
propelled Bacardi executives to safeguard their intellectual property,
secret formula and proprietary yeast critical to making their rum, by
moving them out of Cuba.

On October 13th, 1960, the new Cuban Revolutionary Government, which had
come to power in 1959, approved Law 890 nationalizing all major
industries and putting to an end to private property in Cuba. Besides
foreign-owned property and entities, nearly 400 Cuban-owned companies,
including banks and manufacturing facilities, were also illegally seized.

On October 14th, Cuban regime army officers headed to the Bacardi sales
office in Havana with a single-page document claiming control of the
Cuban company. But the new Cuban government made a critical error, and
the repercussions live on in the world of rum today. The officers went
to the wrong building and the wrong city of Havana. The Bacardi
headquarters and production facility were in Santiago, on the other side
of the country. Those responsible for seizing Bacardi had to catch a
flight to get to Santiago and that gave Bacardi a 24-hour heads-up to
destroy all of the signature yeast which gives their rum its taste and
consistency; thereby preventing anyone else from ever making BACARDI rum
in Cuba.

The following day, on October 15th, officials of the revolutionary
government showed up at the Bacardi headquarters in Santiago and forced
Bacardi executives to sign an 'Expropriation Document.' With the stroke
of a pen, the company&'s Cuban assets were confiscated and the Bacardi
family lost what had taken 98-years to build.

Bacardi already had already established operations in four other markets
- the U.S., Mexico, Puerto Rico and the Bahamas - and the trademarks and
the BACARDI yeast were safely out of Cuba before the revolutionary
forces took control. The coveted strain of yeast remains under tight
security.

Because of their foresight and quick action, what might have been a
devastating loss for Bacardi actually enabled Bacardi to remain
family-owned and regroup to become the third largest international
spirits company selling globally recognized and iconic brands and labels
in more than 150 countries.

"Had we not taken such steps to protect our assets, we may not have
established the footholds in other markets that helped propel BACARDÍ
rum to the forefront of spirits industry. Those decisions by Bacardi
executives more than five decades ago helped take the Company to new
heights and strategically positioned to acquire an international
portfolio of great-tasting spirits," said Ed Shirley, President and CEO
of family-owned Bacardi Limited, with its global headquarters in Bermuda.

Bacardi remains proud of its Cuban heritage and looks forward to a time
when it can return and reinvest in its homeland and help Cuba move into
the modern world.

http://www.sciencecodex.com/bacardi_turns_150_reflects_on_communist_cuba_nationalization_of_its_assets-100496