Read an Excerpt
CHAPTER 1
The Bacardí-Bouteiller Company
THE SUGAR ISLANDS AND RUM
In the middle of the eighteenth century, the Spanish crown decided that Cuba would be the only producer of sugar in the empire, a decision which resulted in the proliferation of plantations of the sweet cane throughout the length and breadth of the island. The metropolis urgently wanted the white gold and in order to deliver it the extensive planting went some way towards damaging the fertile soil and the bodies of African slaves. The crown was blessed with good fortune. In 1791, Cuba was catapulted to becoming the world's leading producer and exporter of sucrose. It was in that year that the machetes of the Haitian slaves stopped cutting cane and began beheading their masters in the first mass rebellion of black slaves in history. A terrified rumour circulated among the gentlemen of the Caribbean, laying the blame for the diabolical insurrection on the consumption of rum. There could be no other explanation.
But after sugar came the rum. The Spanish crown used the mercantile trick known as protectionism to limit severely the export of Cuban spirit so that peninsular production did not have any competition. However, upon noticing the error, in 1796 that policy was radically changed. Cuba, with huge quantities of the raw material, took up the slack rope from its neighbours and began to attract French and English experts in making rum.
THE US ALMOST RUINS BACARDÍ
In 1830, attracted by the increase in trade with the eastern province of Oriente and keen to make a quick fortune, the Bacardí-Mazó brothers moved to Santiago de Cuba from the town of Sitges near Barcelona, in the old principality of Catalonia. According to the commercial register of the time, they set up a store in February 1841 where they sold provisions, hardware, clothes and spirits. Three years later, the Sociedad Facundo Bacardí y Cía was registered as a clothing manufacturer.
Amid the abundance, when it was least expected, in 1857 the Cuban economy suffered a tremendous blow: the loss of markets in France and Germany which had begun to extract sugar from beet. At this point the United States took advantage of the situation to become the island's leading customer and impose its own terms of trade, including a spectacular drop in price.
It is certain that the Bacardís and other Cuban merchants cursed their bad neighbour to the north. Few of them survived total ruin, but among the survivors were the Bacardís. Their salvation lay in the fortunes of Lucía Victoria Moreau, who married Facundo Bacardí-Mazó, and another wealthy family the Arabitg-Astiés, who were committed to the Bacardís through being the godparents of two of them. With their financial support and spurred on by the stability of the price of rum during the crisis, the young José Bacardí-Mazó entered into rum production and sale.
BOUTEILLER PRODUCES BACARDÍ RUM
In June 1862 even the shade was no protection against the inclement sun that fell on Santiago de Cuba. But José León Bouteiller, who was of French origin, ignored the blazing heat and eagerly set out to teach the brothers José and Facundo Bacardí-Mazó how to make rum. Bouteiller was not the inventor of the distillation process. From times long past rum had been an integral part of the crimes, attacks and other diversions practised by the pirates and corsairs who roamed the Caribbean. Jamaica is the place most people believe the drink originated from, while Martinique, Haiti and other Antillian islands abound with fantastic stories related to the origin of this spirit that burns the throat and which made men of European adventurers.
On 24 February 1862, a transfer of property was signed in Santiago de Cuba Town Hall. From that day onwards, the liquor company Manuel Idral y Cía. came to be called José Bacardí y Cía. A little later, on 2 June, the brothers José and Facundo Bacardí and José León Bouteiller went to the town hall in person in order to register their ownership of the company.
José Bacardí was the principal partner, having provided a capital of 3,000 pesos. Bouteiller, who had been ruined by the economic crisis and had been obliged to close his own distillery, transferred part of his equipment and became the second investor. Facundo, who had worked briefly for Bouteiller, borrowed a modest house (not part of the company's assets) with a large yard where the new business was set up to produce rum and other alcohols.
In general, Cuban manufacturers produced a good quality rum, but it was still too crude for the delicate palate and taste of the local and European aristocracy. Undoubtedly, the Sociedad Bacardí-Bouteiller spent great efforts on the improvement of its aroma and taste, especially Bouteiller who had much experience in the trade. It was a knowledge that Facundo quickly acquired, as he took part in the patient task of searching for the quality, the exact bouquet, that would distinguish Bacardí rum from others while it was still produced on Cuban soil.
In spite of the slow development of the company, Bacardí became nationally known on 10 November 1874 when Facundo, representing his wife and using her money as well as money received in inheritance from the Arabitg-Astié family, bought out his brother from the company. A month later, he showed Bouteiller the door and took over the distillery for himself, along with two of his sons, the Bacardí-Moreaus, renaming it Bacardí y Cía.
It is fortunate that the archives in Santiago de Cuba retain a mention of José León Bouteiller and his early support for Facundo. There are no records of him anywhere else despite the fact that without him there would never have been a rum called Bacardí.
EARNINGS THAT SOUND LIKE FANTASY
You get the feeling that the history of Bacardí in Cuba stopped with the disappearance of the first generation of its owners. The museum founded by Emilio Bacardí-Moreau, a patriot who fought against Spanish colonialism, is the pride of the inhabitants in Santiago de Cuba. The stories of the paternalism that the Bacardís showed towards the local population have been passed down orally through the generations. For this reason all the ruses that were used by those first businessmen in their rise to fortune have remained in the folk memory as picaresque anecdotes.
In 1880 a fire devoured the distillery and, with it, the archives of the company. But production was renewed a year later leading to earnings of 22,696.26 pesos in 1883. Inexplicably, between 1884 and 1890 it is almost impossible to find accurate information of earnings or losses. What is certain is that the company's balance sheet of 1891 showed assets of 64,839.45 pesos. Such high earnings are extraordinary considering that the company was still producing rum by hand. In 1899, the company's machinery and tools were valued at less than 6,000 pesos.
From 1891 to 1893 the accounts were all in the black, but then, surprisingly, the following year, and only in that year, losses were declared. At that exact time, the sons, Emilio and Facundo Bacardí, announced that they had a new partner, their sister's husband, Enrique Schueg. Their father, Facundo, had died in 1886. Enrique is still mentioned albeit only modestly by the official history of the company, almost certainly due to the continued though latent presence of his descendants among the shareholders. However, Enrique contributed an immense amount to the company with his solid capacity for commercial organisation acquired during his higher education in England.
BUSINESS AND PRO-ANNEXATIONISM
In 1898, when Cuba was about to achieve its independence from the Spanish colonial empire, the United States entered the war without any request from the Cuban patriots. Spain was defeated, but from 1901 the island became a US protectorate, meaning that it became a US semi-colony.
The first Cuban Constitution included an addition imposed by the US Congress called the Platt Amendment which recognised the right of the United States to intervene in Cuban internal affairs, limited the right of the Cuban government to sign treaties or obtain loans from abroad, and gave the United States the right to acquire land and run naval bases on Cuban soil. This degrading situation continued until 1933, although the basic principles of the amendment still remain in the relationship between the two nations.
But how does the transnational Bacardí-Martini describe today what happened in those years?
In 1898, United States forces helped Cuban patriots to cast off their colonial ruler and achieve independence, a process that had long been supported, at great personal risk, by the courageous contributions of Don Facundo's successor as head of the family, Emilio.
Let's look at this more closely. The Emilio mentioned here is not the original founder of the Sociedad Bacardí-Bouteiller, but the son of Facundo and Lucía Victoria. Emilio Bacardí-Moreau did fight and was deported to Spain for fighting for Cuban independence. He was imprisoned on two occasions. But what does not appear in the official history of Bacardí is that, after his expulsion from Spain, the United States imposed one of their own military-like governors on Santiago de Cuba who in turn decided that Emilio should be mayor of the city. As an individual of principles who was loyal to the nation, he refused. He did become mayor and, later on a senator, but only after the Santiagueros elected him.
During those first years of the new century, Bacardí was one of the few native companies that made a profit from the semi-colonial condition into which Cuba sank. It was a situation that might be understood from the merely commercial point of view. What gives us cause for reflection is the way in which the matter is recounted by the multinational:
The US assisted Cuba in gaining independence, and Cuba, among its many gifts in return, gave North Americans a taste for the tropical spirit made in Santiago de Cuba: BACARDI Rum. In the climate of turn-of-the-century US protectionism, Bacardí thereby gained a foothold in a market that it would carefully cultivate.
In 1910 the Bacardí company began their expansionist career by bottling rum in Barcelona. When the First World War exploded in Europe in 1914, Bacardí opened a distribution office in New York, thus making it a participant in the bonanza that the United States was enjoying at the cost of the European bloodbath. In 1913 its earnings had been 175,422.83 pesos, but as the end of the war approached in 1917 they had increased to 416,900.00 pesos.
There are numerous spurious explanations to explain the apparent incongruity between Bacardí's real productive capacity and its earnings in the early part of the twentieth century. For example, it is suggested that the company smuggled rum from Jamaica and packed it in Bacardí bottles to meet the demand. In Santiago de Cuba this is one of the past misdemeanours for which Bacardí is now forgiven; everyone there was happy with that generation of the family because, nationalists that they were, they reinvested their profits at home.
CHAPTER 2
Expansion and Prelude to Departure
MILLIONS AMID THE CRISIS
In 1921, the company declared that its assets had amounted to about 6 million pesos in the previous year. In 1927, the shareholders founded a brewery; in 1929 they began to bottle rum in Mexico and in 1936 they built a factory in Puerto Rico. Proud of their success and relishing the future, in 1936 the proprietors told the Cuban magazine Carteles that besides the above they also owned an immense distillery containing thousands of barrels of rum and a store of mature aguardientes. They said they could mature up to 5 millions gallons of rum. They also boasted of huge shipping warehouses, a box factory, another for bottles, another for producing ice, an electricity plant, several railway boxcars for the transport of their products, rail tankers for the transport of 'mieles' (literally 'honeys'), mechanical and carpentry workshops and a foundry; not to mention the magnificent Bacardí building in Havana.
Due to its absolute dependence on the US, the economic crisis in October 1929 dragged the Cuban economy towards the abyss. But while the US recovered and continued along its resolute road, Cuba remained gravely wounded. In 1932, the price of the sugar fell to less than 1 cent a pound and the unemployment figures were worse than those of any other country. The rum barons were among the few members of the indigenous bourgeoisie who survived. Most struggled daily to keep their businesses against US competition. Their properties were fetching bargain prices for any foreigner.
From the Cuban commercial archives it is difficult to tell exactly what the Bacardí company did in order to achieve such a strong inventory. It is like looking for a needle in a haystack. In which bottle did the company hide its King Midas? Rum may burn, but it is not petroleum.
'THE RUM ROUTE'
In 1919, the US government passed the 18th Amendment banning the production, sale and import of all types of drinking alcohol. Prohibition, as it came to be known, opened the way to the formation of a new criminal class, initially known as bootleggers and racketeers, who later would evolve into the Cosa Nostra. Headed by people such as Al Capone, Santos Trafficante and Meyer Lansky, these gangs organised and developed the illicit production and smuggling of alcohol on a grand scale.
There were three key places where they could procure alcohol without much difficulty. These were three points on the map which, in the parlance of the criminal gangs, came to be known as the 'rum route': Jamaica, Cuba and New Orleans. By the time Prohibition was repealed at the end of 1933, the Mafiosi had converted themselves into powerful businessmen. The Cosa Nostra's millions washed through the US economy, leaving in their wake many gifts in the hands of not a few church dignitaries, politicians and security service chiefs. That same year, Meyer Lansky received from the Cuban government the exclusive right to exploit the gambling casinos on the island. With this the Cosa Nostra succeeded in securing their 'first opening in the Caribbean, and the same would later happen in Nassau', according to the 'boss of bosses', Lucky Luciano.
'THE GOLDEN AGE OF COCKTAILS'
What does the version of history published by Bacardí-Martini say about this period? What does Prohibition mean to its current shareholders and management? It should be noted that, just as Prohibition began, Bacardí rum was starting to gain prestige in the United States. Prohibition did not apply in Cuba:
The company grew rapidly in the new century. Between 1912 and 1919, sales increased. Then, in 1920, with the coming of Prohibition in the US, history again dealt Bacardí an apparently telling blow which, characteristically, it turned into an opportunity.
During Prohibition, all the famous international spirits were effectively excluded from the US market. However, Cuba, because of its proximity to the United States, became a prime destination for parched American vacationers. As they arrived in Havana, they were greeted at a bar that dispensed free Bacardí Rum cocktails. They continued to enjoy a variety of rum drinks all through their stay in Cuba in what has come to be known as 'The Golden Age of Cocktails'. North Americans returned home with happy tropical memories and a taste for Bacardí Rum. During this challenging period, although no sales were permitted, enthusiastic and inventive consumers found ways to bring Bacardí into the market against the restrictions of the law ...
Let us keep in mind that prohibition not only filled the Cosa Nostra with dollars. When it was repealed, the official figures began to show that the sales multiplied for those companies that, directly or indirectly, had benefited from the illicit trade. Bacardí was among them. In the first year after Prohibition it sold 80,000 boxes of rum in United States. How did Bacardí sell approximately 1 million bottles of rum so quickly in a market that had been closed for almost 14 years?
BUSINESS BEFORE NATIONAL INTERESTS
Bacardí's expansion was not without its critics at home. The Cuban economist and academic Jacinto Torras argued that the company's siting of bottling plants and factories in Mexico, Puerto Rico and the Virgin Islands was 'deeply harmful to the national economy'. For example, the processing plant in Borinquen, Puerto Rico, had an absolute logic for the shareholders because the rum produced there entered the US market tax free because the island is a US colony. Torras explained the matter in the following way:
In order to defend their mercantile interests, the 'Bacardí' company often speaks of its 'Cubanism.' A very particular Cubanism that is carefully measured in pesos and centavos and very given to a keen hatred of the common interest [...] In the naked interest of business, mercenary to the highest degree [...] the current 'Bacardí' company denies in practice the pure Cuban history of Don Emilio [...]
(Continues…)
Excerpted from "Bacardí"
by .
Copyright © 2000 Hernando Calvo Ospina and EPO.
Excerpted by permission of Pluto Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
