Rum row turns sour

Pernod is marketing Havana Club in Europe

The EU and the US are set for another trade clash in the World Trade Organisation over the ownership of a brand of rum.

The EU is backing French drinks company Pernod-Ricard in its battle over the copyright to the "Havana Club" brand which is also claimed by Bacardi, a Bermuda company which used to be based in Cuba.

Cuban rum, made in the Bahamas

At the heart of the case is US legislation which gives companies who fled Cuba after the revolution the rights to any trademarks confiscated by the Cuban government.

The EU says that breaches international trade law.

The dispute is the latest in a series of trade skirmishes between the world's two biggest trading blocs.

This is an unwarranted and reckless intrusion into a civil dispute between two business competitors.

Bacardi

The WTO has already ruled against the EU in two cases, involving the import of Caribbean bananas and hormone-treated beef, and against the US in another, involving tax breaks for foreign sales by US multinationals.

And last month the US said it questioned EU plans to aid Airbus in the launch of a new super jumbo commercial aircraft.

Cuban revolution

Bacardi, the world's biggest privately-held drinks company, is the world's leading rum producer.

The $1.5bn (£1bn) US rum market is the world's biggest, and Bacardi controls half of it.

Bacardi claims to have bought the rights to the Havana Club brand from the Arechabala family in 1997.

The Arechabala's Cuban rum factory was nationalised by the Cuban government in 1960.

Pernod-Ricard, meanwhile, had established a joint venture with a Cuban rum company to market Havana Club rum worldwide.

It took Bacardi to court when the company began to market a Bahamian rum in the US under the Havana Club brand, but a US court ruled against Pernod in February.

The EU says it has failed to make any progress in discussions with the US over the issue, and a WTO disputes panel will now convene on 27 July.

Bacardi has called the EU's complaint "an unwarranted and reckless intrusion into a civil dispute between two business competitors".

But Pernod said it was confident that the disputes panel would uphold its rights in international trade law.

Helms-Burton

The US legislation is one of a raft of measures designed to enforce a boycott of the Cuban economy.

Even if Pernod wins its case at the WTO, it will not be able to market its Cuban rum in the US until the US lifts the total ban on Cuban imports which has been in place since 1962.

The EU has also objected to the Helms-Burton Act, which seeks to punish foreign companies that invest in Cuba by restricting their activities in the US.