The Bacardi family: a new rum war is just beginning

With the prospect of a “Cuba libre” tantalisingly close, times have rarely been better for the two million Cuban exiles who have spent the past half century praying for regime change. The most famous and wealthiest by a long way are the 600-strong Bacardi clan – a family as notorious for its feuding as for its rum. And they are marking the occasion in bellicose style, says Louisa Gault in The Sunday Telegraph. “The sun may be setting on Fidel Castro’s reign, but a rum war that has its origins in the 1959 revolution is just beginning.”

The Bacardi family: the Havana Club row 

The Bacardis have never forgiven Castro for seizing their original factory in Santiago de Cuba. But the brand at the centre of the storm, Havana Club, was actually founded by a rival family, the Arechabalas. “Che Guevara’s bodyguards came, put a machine-gun to my head and said, ‘You’ve got to get the hell out of here’,” recalls retired managing director Ramon Arechabala. He fled to Florida, selling the brand to Bacardi in the
mid-1990s. But Castro had other plans. In 1993, he did a deal with Pernod Ricard to distribute Havana Club globally.

The ensuing row, which has embroiled everyone from George Bush to the WTO, came to a head last week when the US Patent & Trademark office granted Bacardi full US rights. Bacardi took the symbolic step of putting the drink on sale in the US and topped that by announcing that the firm planned to float.

The Bacardi family: a history of pragmatism

It was “a momentous week”, even for a family “steeped in the phantasms of its own mythology”, says The Business. The story began in 1829 when founder Don Facundo Bacardi y Maso came to Cuba from Catalonia as a 14-year-old and was apprenticed to an English wine merchant. Put off by harsh brown rum, he experimented to find a purer version.

In 1862, he set up the firm’s first tin-roofed distillery, adopting the black bats that plagued the place as the group’s logo. From day one, the Bacardis were big on pragmatism. During the War of Independence against Spain, they supported the revolutionaries, but supplied rum to Spain’s Royal family. They also cleaned up in the Prohibition era, inviting well-heeled Yanks “to come to Cuba and bathe in Bacardi rum”.

The Bacardi family: avoiding a civil war

The family’s relationship with Castro wasn’t straightforward. They initially financed “el Commandante”. Ties were so close that CEO Jose Pepin Bosch even acted as Castro’s emissary. But once ejected from Cuba, they became his fiercest opponents and were linked in the Sixties with murky plots to overthrow the dictator. Their exile caused other hitches, says The Independent. “The unity of the scattered Bacardis came under serious pressure, leaving many family members more dependent than ever on the good faith of those actually running its affairs.” The opaque network of off-shore trust funds was matched only by the complexity of the group’s structure. Bacardi became a single holding company in 1992, but it still comprises 13 semi-autonomous firms run by separate family members – a recipe for feuding.

But though civil war has often threatened to ruin the Bacardis, they’ve always sprung back. The question now is whether the warring factions will unite behind their “highly regarded” CEO, Andreas Gembler, and let the group go public, says The Business. Bacardi controls two-thirds of the world’s rum trade and is no tiddler. Yet given ongoing consolidation in the industry an initial public offering would make sense. A family row is sure to follow, but “being in the middle of a battle comes as naturally to the Bacardi clan as distilling rum”.

The Bacardi family: the matriarchs whose word is law

The black bat on the Bacardi bottle is said to symbolise
“family unity”, says BusinessWeek. “So much for symbols”. Family members have engaged in 144 years of lawsuits, disinheritances and divorce. Control of the firm and its strategy has ricocheted between warring factions. In 1962, the group almost fell apart when several Bacardis protested the flotation of 10% of the stock. A move to take the group fully private again in 1986 saw the ousting of four dissident directors – the first battle in a skirmish lasting 15 years. Last year, when Facundo Bacardi, 39, became chairman, hopes were high of a lasting truce.

But, as a family member told The Independent in 1996, the real battle for control has traditionally taken place outside the boardroom. “You have to understand that the Bacardi family is matriarchy. The men, with some exceptions, are people of weak character”. The most powerful branch is the Schuegs, descended from the founder’s daughter Amalia. “The Schueg women, even by family standards, are unusually authoritarian”. Cue a long-running court drama sparked when Lisette Arellano Bisson accused her mother, Vilma Schueg de Arellano, and her brother and sister of cutting her out of a $200m inheritance. The case, which rumbles on in the appeal courts, was “as dark as Lorca” and as “vulgar as Dynasty”. But at its root was a simple truth: “Lisette broke the rules”, says the family source. “She challenged the matriarchal order. She married a man Vilma did not like.”