WIRSPA Chairman Komal Samaroo: On the Record

NOTE: This interview originally appeared on the ACR-Rum web site. However, it’s of relevance to rum enthusiasts here on Cocktail Wonk, so it’s also shared here, with permission from WIRSPA.

As Chairman of the Executive Board of the West Indies Rum and Spirits Producers Association (WIRSPA), Komal Samaroo has a very deep knowledge of the rum industry. Having worked in the rum industry since the late 1960s, he’s now put in over fifty years of service to the cause of Caribbean rum.

In addition to his WIRSPA duties, Mr. Samaroo is now Executive Chairman of Demerara Distillers Limited, an indigenous Guyanese firm with thousands of local shareholders that makes, among other things, El Dorado Demerara rum. He also sits on the Board of Directors of National Rums of Jamaica, the consortium that owns the Clarendon and Long Pond distilleries and the Monymusk brand.

During a recent trip to Guyana, I interviewed him in his office at Demerara Distillers Limited. What follows are his thoughts on the WIRSPA, including its role in the rum world, its past and its future.

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Matt Pietrek: How would you describe WIRSPA’s mission to a rum enthusiast without prior awareness of WIRSPA’s existence?

Komal Samaroo: WIRSPA is an association that represents the Caribbean rum industry. I believe in the earlier days the organization spent its time on negotiation of trade agreements. Now that we no longer have trade agreements that give us preferences and preferential access, and since most of our members are premiering their product in the branded segment, WIRSPA’s role has obviously had to change.

I believe that apart from providing services to members by helping them with education and advocacy work at a regional level, WIRSPA needs to also help build the reputation of rums produced in the Caribbean region. So that all of our members will have the opportunity to benefit from an expanded market. A market where rum as a category is better understood. And that education is what I think WIRSPA has a major role in, because my own assessment is that international marketplace does not understand rum.

Matt Pietrek: With fourteen member countries and dozens of producers. It’s inevitable that there will be differences in priorities and direction within WIRSPA decision making. Tell us how decisions get made at WIRSPA.

Komal Samaroo: Well, WIRSPA’s members are the national associations. So, in Barbados where you have several distilleries, they have a national rum association, and that association is the member of WIRSPA. In Jamaica, it’s a similar situation. Obviously in countries like Guyana, Saint Lucia, and Trinidad, where you have only one member — one distillery — it’s much easier. Where there are multiple members, the national association has a representative sitting on the WIRSPA board.

But, generally in our board meetings we invite all their constituent members to be present. They will not have a vote, but they have the opportunity to be present and participate in the discussion. Generally, I think our decision making has been on the basis of consensus.

While we do have two board meetings a year and the biggest things are addressed there, we have an executive committee which is made up of five members. One from the smaller members, and four from the Dominican Republic, Jamaica, Barbados and Guyana are the others at the moment.

The executive committee will normally meet on a quarterly basis and address any matter that needs to be addressed. The CEO and his staff, a small staff I would say, manages the day to day affairs of the organization. And if he needs a decision at any time from the executive committee, he would reach out to us for guidance and direction. But generally, you would see decisions based on consensus.

Matt Pietrek: So there’s rarely a situation where it’s something like a nine to seven vote and you have a lot of contention?

Komal Samaroo: I’ve been chairman for three years and I attended the meetings for about ten years prior and we’ve never had the situation where we had to vote by show of hands. Generally it’s a discussion, a healthy discussion. We disagree at times, but at the end of it all, in the interest of all, we find a compromise.

Matt Pietrek: You spoke about this a little bit previously, but to drill in a tiny bit: Can you explain how the individual producers have input into WIRSPA decision making since the membership is technically by country?

Komal Samaroo: Yes. The national associations are supposed to be active bodies, and they’re supposed to meet and discuss. Minutes are shared with all members, so they know who their representative is on the WIRSPA board and the need to build national consensus.

Certainly since I became chairman three years ago, I’ve made it a point to reach out to all the individual members. We have membership with multiple distilleries, and we pretty much met every one of them. And we’ve said: “This is your organization.”

You may not be represented directly but you’re represented through your representative. We are opening up the process for you to come and be part of the discussion. At the end of the day you have one vote, but it is open to you. We have reached out, starting with the Dominican Republic, I’ve met all the members there; I met the members in Barbados; I’ve met our members in Jamaica; and we’ve stretched out our hands and said “Join us”.

Matt Pietrek: So, you’re open about the process?

Komal Samaroo: Very open.

Matt Pietrek: Outside of the member country rum associations that you’ve been talking about, who are the other primary organizations such as CARICOM that WIRSPA works with.

Komal Samaroo: Well CARICOM is the most important one. In the CARICOM process there is the Council on Trade and Economic Development (COTED) that meets, I believe, two times a year. We have reached out, certainly since my seat at the chairmanship. We have reached out to them and presented a paper on the Caribbean rum industry, which after a year or so lobbying was adopted at a meeting in November, two years ago.

And there was a CARICOM work party focused on rum. Basically, we are advocating for the governments to take measures to help the industry to be internationally competitive. A lot of our customs regulations are still archaic, it goes back to when we were colonies, so we have been advocating to the governments: Let’s create a modern industry that could help to contribute more to the regional economy.

So COTED and the CARICOM process is important, as well as CARIFORUM, which includes the Dominican Republic. The CARICOM & CARIFORUM secretariats are important partners. There are several organs of these groupings. There is the Caribbean Export Development Agency. We work with them. Then there’s the regional tourism organization. We believe rum and tourism provides synergies for marketing and expanding opportunities to reach out to people. We’re also a part of the International Alliance for Responsible Drinking, and the World Spirits Alliance.

Through WIRSPA the individual stories of the region are linked into the global industry.

Matt Pietrek: How are WIRSPA’s efforts and initiatives funded?

Komal Samaroo: By our members. We have a budget that’s based on our member’ production. Members have different tranches for how much their fee contribution is — an annual subscription that underwrites the cost of running the organization.

Matt Pietrek: So, each producer’s yearly contribution is tied to how much rum they make?

Komal Samaroo: Yes, depending on the tranche in which your production falls.

Matt Pietrek: They don’t have to provide you an exact figure then?  Rather, it’s like “If you make a million liters or more, it’s this much.”

Komal Samaroo: Right.

Matt Pietrek: Many enthusiasts were happy about the Authentic Caribbean Rum (ACR) mark when it came out. However, efforts to promote it via trade shows and education programs have dropped off. Can you share why that is, and if you believe there’s a chance of re-energizing this program?

Komal Samaroo: The Authentic Caribbean Rum mark came out of funding provided by the European Union when the Lomé Convention agreement ended. It was an arrangement that was negotiated for the rum, and all industries benefited, to be given a sum of money to put the industry on an internationally competitive footing.

In that process, a significant part of the funding was used to create the Authentic Caribbean Rum mark, which we hoped would help benchmark our producers’ brands in international marketplace. With the ending of that program a few years ago, the funding that was available for ongoing marketing of the Authentic Caribbean Rum mark is no longer there.

We have been engaging the European Union to see what opportunities exist, but at the present time, it’s very limited. Our members will have to fund it. I believe that at this point in time, they do not have the capacity to make significant contributions to continue the marketing of the Authentic Caribbean Rum mark.

We continue to engage the governments to see whether there is aid funding available through any source. We believe that there is a huge value in the Authentic Caribbean Rum mark. I believe the work that was done during the period of the EU project helped to highlight the Caribbean rums more than any other, and I would not say that the mark has come to an end. I would say that, while we are looking for funding opportunities, I do believe that it will be some time before we can really get back on that.

Matt Pietrek: Does WIRSPA have any authority, or legal powers, or regulations, or regulatory authorities over rum production in member countries?

Komal Samaroo: No. But there is the Caribbean rum standard that WIRSPA and the members subscribe to. And wherever we believe that a member is not complying, WIRSPA has the authority as a condition of membership to allow the organization to examine their records and to engage in a review of their process to make sure that this complies with the requirements.

Matt Pietrek: Would it be accurate to say that the CARICOM rum standard and the ACR Mark are essentially covering the same requirements?

Komal Samaroo: Yes. But the Caribbean rum standards in each individual country are supported by the Bureaux of standards. The Bureaux of standards across the region, our network and the regional organization called CROSQ – the Caribbean Regional Organisation for Standards and Quality.

Matt Pietrek: what are the biggest challenges facing the WIRSPA member countries today?

Komal Samaroo: I believe that since the financial crisis of 2008, a lot of the regional economies have been struggling. Most of them are tourism-based economies, and most have seen declines in visitor arrivals. Their industries, which were benefiting from preferential access, such as rum, sugar, rice, those preferences are no longer available, and there has been a significant impact on the ability of governments to support social programs in the country.

So I, would say an economic decline. One particular member that depended heavily on the oil and gas sector has been in decline since the oil prices have receded from what it was at one stage. So I would say that the macro economic situation of most of our territories is very challenging.

Matt Pietrek: What are some of the biggest success stories that WIRSPA has had over the past decade?

Komal Samaroo: I think certainly the Authentic Caribbean Mark was a high point. The effort to get the governments on board to sit with the industry and find strategies for making it competitive has been a major accomplishment. But even before that we mobilized US $50 million for producers to invest in upgrading production equipment and ageing facilities, which all producers befitted from. I believe that the education programs we have embarked on for our members. I think this has been an innovation.

Matt Pietrek: Like the Alcohol School?

Komal Samaroo: The Alcohol School — yes. We’ve had many technical seminars and things like that. We’ve just signed up with the University of the West Indies to provide training for people in the rum industry. Pulling the industry together and engaging other actors in the region has been a major step forward as well.

Matt Pietrek: When it comes to geographical indications, do you see WIRSPA having a role in getting them widely recognized on the global stage? For example, within the EU and the United States? Or is that work entirely up to the individual countries?

Komal Samaroo: Under the economic partnership agreements between CARIFORUM and the Europeans, it’s an agreement by individual countries with the Europeans. And there is an understanding that each country will develop their national GI’s, and at some point in time both sides will give mutual recognition. I think on the Caribbean side, that process has been quite slow. I believe it’s a capacity issue.

But I believe that at this point in time, it is up to the national government to set up the legislation, because you need to establish a GI law. And then you need to establish the mechanism by which the standards can be defined and policed to ensure compliance. But that’s a national responsibility.

Matt Pietrek: Do you foresee WIRSPA adding more member countries going forwards? For example, I’ve read about Cuba possibly being interested.

Komal Samaroo: Yes, I think that’s definitely something that we are looking at. I think we need to look to see how we expand the organization so that we could make it much more viable and involve the wider Caribbean. I definitely think that is something that is on the agenda.

Matt Pietrek: What are you most proud of as your tenure as WIRSPA chairman?

Komal Samaroo: Well, I’m delighted that I have refocused WIRSPA from being about advocacy for trade preferences with Europe and North American countries where we spent a lot of our time. Now we’re starting to look at ourselves and elevating our product in the global market space so that we can have a greater market share and generate greater revenues for our members. I would say at this point in time, the recognition of premium rums has never been higher than what it is at the present time. I think a lot of that is due to the work we’ve done in WIRSPA.

There’s another very big challenge we face domestically.  Excessive drinking is a serious problem in our societies.  We believe that we have to make a significant and practical contribution to governments efforts to tackle this issue.  We’re changing our labels, implementing new advertising codes of practice and working with stakeholders to better understand how we can support efforts to reduce harmful drinking. This is a challenge that I take personally and to some extent it will define my chairmanship.  We’re companies rooted in our communities and we need to act.