From the quota system to the organization of the rum industry: a look at the first 20 years (1922-1938)

This article, extracted from Rumporter, explores From the quota system to the organization of the rum industry centenary of the quota system in the French rum market. Implemented in 1922, this measure has played a crucial role in organizing the rum industry and establishing a constructive dialogue between producers and the State.

The quota system in the French rum market is celebrating its centenary. This measure, implemented in 1922, has played a crucial role in organizing the rum industry and establishing a constructive dialogue between producers and the State.

The relationship between the State and rum producers has been ambiguous over the years. Initially, the State intervened abruptly in the market, but over time, producers managed to make their voices heard and organize themselves at a national level.

It all began during the First World War in 1914 when rum prices remained stable until they suddenly increased in 1915. Faced with this situation, the State implemented various measures to balance the alcohol market. However, it was in 1918, due to the submarine war in Europe and the Spanish flu, that rum prices reached exorbitant levels.

After the war, a shift occurred in the market. The colonies began importing foreign molasses to compensate for the lack of foreign alcohol in the metropolitan market. This discontented the State, which banned the importation of foreign molasses in the colonies. Meanwhile, metropolitan brandy producers were affected by the falling prices of rum, as many opted to purchase rum at low cost for rectification instead of using metropolitan spirits.

In response to this situation, the quota system was introduced in 1922. This system established limits on the importation of colonial rum, except for a specified quantity that would be exempt from taxes. Although there were protests and disagreements over the distribution of quotas, rum prices stabilized, and producers expressed satisfaction.

In the 1930s, a consumption crisis occurred, leading to a series of additional measures. Staggered shipments were implemented, quota buybacks by the State took place, and a temporary tax was established to finance these actions. These measures succeeded in stabilizing the rum market but also generated some controversy between producers and traders.

In 1937, a finance law was enacted that established principles for managing rum quotas. A Consultative Commission for Rum was created, bringing together different stakeholders in the industry to make decisions on minimum prices, staggering, market sanitation, and financing. This law marked a turning point in the rum industry, establishing a co-management system where the State and producers collaborated to find an appropriate balance.

In summary, the first 20 years of the quota system in the rum industry were a period of adjustments and negotiations. The State intervened to stabilize the market, and producers managed to organize themselves and assert their views. Although challenges and controversies arose, this organizational effort laid the foundation for the development of the rum industry in the subsequent years.