While the overall UK spirits market contracts, one category has remained defiantly buoyant – rum.
Digging into the numbers showcases rum’s momentum: Despite an overall sales decline of -3% in 2023, the category was one of the fastest growing in the off-trade over the prior 4 years, up 21%, with flavoured and spiced variants comprising 50% of that growth.1
Navigating the Complex World of Rum Imports
The rum sold in the UK comes from various sources, with some produced locally, but the vast majority being imported. Importing rum, however, is a more intricate process compared to other spirits, owing to a few lesser-known obstacles.
In this article we take a look at the challenges and common pitfalls to watch out for when importing bulk rum to the UK.
The Lack of a Universal Rum Definition
One of the key challenges lies in the absence of a universal definition of rum. This ambiguity affects commodity codes, import tariffs and export of the finished product.
For instance, several Latin Caribbean countries, such as Panama, The Dominican Republic, and Venezuela do not recognise unaged rum as rum.
To be classified as rum it must be aged for at least 2 years, anything else being categorised as ethanol.
Bottling ethanol and selling it as rum is illegal in the UK, requiring importers to stay vigilant about the commodity code used.
Rum Distillation Regulations Vary Across Markets
Another factor to consider is the distillation regulations. Under EU, UK and Caricom (The Caribbean Community and Common Market2) regulations, rum must be distilled to an ABV below 96%, while in the USA, according to the TTB (Tobacco Tax & Trade Bureau), rum can only be distilled to below 95%. Exporters to the US market should be aware of this distinction.
Navigating the Complexities of EU-UK Trade Agreements
Even for rum sourced from within the EU, such as the Netherlands, France, Spain, and even Ireland, the receiver automatically becomes an importer and is responsible for understanding the regulations. Many wrongly assume that the trade agreement between EU and the UK means that there is no import duty on rum, but this is not always the case. The price of rum (not including freight), its origin, and the excise status all play a role in determining the applicable import duties.
Putting this into Practice
One might assume that since both the EU and the UK have a trade agreement with, for example Jamaica, that rum shipped from Jamaica to the EU and then exported to the UK would be automatically duty free.
Wrong, I’m afraid.
If the rum has been released for free circulation in the EU, it becomes classified as a Third Country product and different import rules apply.
Some EU exporters are not aware of these rules or might not voluntarily disclose this information. However, the ultimate responsibility lies with the UK importer to understand and comply with the rules. Unfortunately, several UK distillers have been caught by HMRC for failing to pay the required import duty on rum destined for UK imports.
Ethimex: Guiding Importers Through the Rum Boom
With the UK now ranking as the 3rd largest global rum market valued at £1.17 billion3, getting ahead of the rum boom will be key for growth in this challenging market. At Ethimex we have a team of six export logistics experts who can help navigate these complexities and ensure that you are asking the right questions to your suppliers.
- WSTA Market Report, December 2023 ↩︎
- CARICOM, The Caribbean Community ↩︎
- Rum in United Kingdom Market Overview 2023-2027, Market Overview Report – August 2023 ↩︎
