Deal keeps Captain Morgan anchored in a U.S. territory


The article regarding the rum controversy in Puerto Rico misstates several facts (“SEIU sides with Puerto Rico in rum tax dispute,” Dec. 1). In truth, the U.S. Virgin Islands’ economic development agreement with Captain Morgan-owner Diageo prevents jobs from leaving the United States. This beneficial public-private partnership will grow the USVI’s rum industry, strengthen the USVI government’s finances and benefit local residents.

Opponents of this agreement in Puerto Rico apparently are willing to inflict whatever collateral damage is necessary to destroy a commercial agreement they couldn’t win for themselves. The Service Employees International Union has not formally involved itself in this issue. But the letter from an SEIU affiliate, which doesn’t speak for the union as a whole, has been inserted to try and turn this into an union/anti-union dispute, which it is not!

The Diageo-USVI agreement doesn’t “eliminate” union jobs; in fact, the agreement is the only reason jobs producing Captain Morgan will remain in the country.

*  Diageo owns no Puerto Rican distillery; it purchases rum from a Puerto Rican supplier, Destileria Serralles. During contract extension negotiations, Destileria Serralles and Diageo were unable to agree upon reasonable market pricing, while the Puerto Rican government failed to involve itself in the discussions. This forced Diageo to consider relocating outside the country. It explored Central American and Caribbean countries offering lower costs, cheaper labor and weaker environmental standards.

* Diageo then approached the USVI. USVI Gov. John deJongh secured an agreement guaranteeing the company’s jobs and economic impact remain on U.S. soil for 30 years, rather than join millions of union jobs shipped offshore.

*  The unionized workers at Destileria Serralles will continue producing rum for Diageo for several years — and won’t lose work at all if the distillery succeeds in attracting new customers. That’s what its owners themselves expect, including working to lure Sailor Jerry rum to Puerto Rico from the USVI, according to the Puerto Rican publication Caribbean Business.

Puerto Rican businesses have long dominated the private sector in the USVI. Our families have traveled there for healthcare, education and shopping. In many ways the USVI has supported the Puerto Rican economy. There is no reason why we would do anything to try and destroy that relationship. This controversy threatens to do that, and threatens an important source of revenue for both PR and the VI through retaliation against the USVI for a presumed injury that never occurred.

We would hate to see our friend, neighbor and longtime partner turn into a big bully out to destroy its smaller counterpart. I call on the governor and resident commissioner of Puerto Rico to call off this destructive campaign that is not good for either of us.

Del. Donna Christensen (D-Virgin Islands), Washington

Your article makes two critical errors, both of which invalidate SEIU’s argument. First, Diageo is not moving a Captain Morgan distillery from Puerto Rico to the U.S. Virgin Islands.  Diageo does not own or operate a distillery in Puerto Rico. Diageo has an agreement with a third-party supplier in Puerto Rico to produce rum for the Captain Morgan brand, which expires in 2011.  When it became clear that we would not be renewing that agreement, we made our plans public in 2008, several years prior to the expiration of the agreement, in order to give the third-party supplier and the Puerto Rican government ample time to attract replacement rum production.

Second, we are creating jobs in the U.S., not eliminating them. Because we were ultimately unable to come to an agreement that would allow us to secure rum supply in Puerto Rico after 2011 at a reasonable price, we began to explore the option of sourcing rum from other venues in the Caribbean basin, including Central and South American countries. Ultimately, building a facility in the U.S. Virgin Islands was the only cost-effective alternative that allowed us to remain in the United States, and we are proud to not only be staying in this country, but to also be creating jobs at a time when they are desperately needed.

From Guy L. Smith, executive vice president, Diageo North America, Norwalk, Conn.

Proving ground

President Barack Obama’s own Chicago is a virtual war zone. Would Obama conclude security for the non-gang residents would improve if we sent in tanks? Would training and arming the non-gang residents, like we do in AfPak, end the violence, making it safe to go to school? Would dropping a bomb from a drone on gang members’ homes be celebrated as a kill? 

Prove it in Chicago first, please, Mr. President.

From Nydra Karlen, Bellevue, Neb.