Rum and Revolution

How the Bacardi family mixed business and politics to build a liquor empire.

Reviewed by Linda Robinson
Sunday, August 24, 2008; Page BW03


The Biography of a Cause

By Tom Gjelten

Viking. 413 pp. $27.95

Drinkers the world round know the name Bacardi means rum, but few non-Cubans know that this global enterprise was founded -- and is still owned -- by a Cuban family that played an important role in the island's social, political and economic history. Emilio Bacardi was a prominent activist in Cuba's fight for independence from Spain, suffering lengthy periods of imprisonment for the cause. Other members of the clan, based in Cuba's eastern city of Santiago, also stepped forward to oppose the sad parade of corrupt and dictatorial rulers that the island has since known. Longtime NPR correspondent Tom Gjelten writes in this absorbing familial and political history that the Bacardis are still remembered for "their class and their character. While they lived in elegant homes, rode in chauffeured carriages, and sent their children to exclusive private schools, they were also known as good Santiago citizens, generous and warmhearted and fair."

A Spanish immigrant by the name of Facundo Bacardi founded a mom-and-pop distillery in Santiago in 1862, when the island was the world's richest colony, thanks to its vast sugarcane plantations and sugar mills. Bacardi realized that, unlike other sugar-producing islands, Cuba was not using the molasses byproduct to make and export rum. Pooling family funds to launch his business, Bacardi pioneered a new technique to produce a light, mixable rum that became a powerhouse in the worldwide spirits business.

Bacardi and the Long Fight for Cuba (being published next week) is at once a colorful family saga and a carefully researched corrective to caricatures of decadent pre-revolutionary Cuba and the 50-year disaster of Fidel Castro's rule. Contrary to the impression that Cuba's elite uniformly backed dictator Fulgencio Batista, for example, Gjelten shows that the Bacardis withheld their financial support, even when they received a written demand from one of Batista's goons saying, "We will collect the funds for this event from friends of the cause . . . among whom we include you." To ignore such a demand was risky, Gjelten writes, but the head of the family "was as courageous as he was stubborn. He passed the letter on to his secretary, with a brief instruction scrawled across the top: 'Return -- regretting not being able to cooperate.' "

The Bacardi liquor story is every bit as engaging as Cuba's tumultuous political history, and both narrative strands are inexorably intertwined. Facundo Bacardi's sons inherited his business, and the eldest, Emilio, a liberal intellectual schooled in Spain, was drawn into the fight for independence, which finally succeeded shortly after the United States intervened in 1898. After the war, Emilio was elected mayor of Santiago and then to the senate.

But Cuba's independence was stunted by the heavy-handed United States, which doubted that the republic (over half of whose population was black or mulatto) could govern itself. The United States aided Cuba's fight but then re-occupied the island in 1906 at the request of the feckless Cuban president, Tomás Estrada Palma. A bitterly disappointed Emilio left government and returned to Santiago, where he penned a 10-volume history of the city and tended his business affairs for the remainder of his life.

The extraordinary success of Bacardi rum and its conversion into an international brand were due in large measure to the business genius of two successive Bacardi sons-in-law. The first one, Enrique Schueg, played a leading role in the family-owned company for 50 years. Schueg's vision led the company to expand its market steadily, first to the jet-set visitors and then to average tourists who flocked to the island during Prohibition to enjoy the music, stage shows, drink and gambling for which Cuba became famous. Having branded Cuba as the home of rum, and Bacardi as the king of rums, Schueg then moved production overseas, first to Puerto Rico, where tariff-free rum was made for the post-Prohibition U.S. market, and then to Mexico.

Throughout his stewardship, Schueg managed to enlist support for his plans from the various Bacardi family branches that to this day retain voting shares. Some family feathers were ruffled when control of the company passed in 1950 to his son-in-law, José "Pepín" Bosch. But Bosch repeatedly proved his marketing acumen; he turned around the faltering expansion in Mexico, for instance, by finding ways to persuade tequila drinkers to buy rum. And he upheld the Bacardi tradition of treating workers well and donating generously to social welfare and cultural causes.

Bosch was also sporadically drawn into Cuban politics. Infuriated by the rapacious corruption of "more or less honestly" elected president Gerardo Machado, the short, fiery-tempered businessman backed an uprising in 1931 and had to flee the island once the rebellion collapsed. Years later, in 1950, Bosch was persuaded to serve briefly as finance minister and managed to put the budget into the black in little more than a year, but corruption returned as soon as he left the post. The Bacardi family then collided with the Batista regime, which used the national labor federation to stir up trouble and attempt to extort money from the company.

In an often overlooked part of Cuban history, Bosch and other Bacardi family members supported the Cuban revolutionaries, including Fidel Castro and the broader M-26-7 organization. It is unlikely that Castro's revolution would have succeeded without the wide middle-class support that it enjoyed, a reaction against the brutal repression of the Batista regime and its thugs. Gjelten recounts that Bosch personally donated at least $38,500 (equivalent to $275,000 today) and arranged meetings between the revolutionaries and the CIA to assuage the latter's concerns. Other Bacardi family members, employees and facilities were also put at the service of the underground.

The Bacardi company welcomed the revolution publicly with ads and parties, but Bosch grew wary of the Castro regime as its pro-Soviet Che Guevara wing became dominant and Castro's dictatorial tendencies became clear. Bosch's fears were confirmed in 1960 when Castro expropriated the holdings of large landowners and all major companies, including Bacardi. But unlike many Cuban elites who became penniless overnight, the Bacardi clan was able to rebound quickly and provide aid and jobs to the Cuban employees who left the island. The business survived because Bosch had already created a network of international holding companies and mailed the trademark certificates to his New York office. By 1965 Bacardi had five plants in four countries, and Bosch had successfully positioned the company for future growth, shorn of its connection to the Cuban controversies.

Personally, however, Bosch was embittered by what he regarded as Castro's betrayal of the revolution. Bacardi had been a patriotic firm with a long history of supporting social welfare reforms, and Bosch was not content to settle into the life of an exile. He funded counter-revolutionary attacks on Cuba and donated generously to exile organizations that have opposed Castro for the past half-century. In addition, the company has gone to great lengths in recent years to lobby for a tightened U.S. embargo and to fight the French liquor company Pernod's effort to market Cuba's Havana Club rum, a legal duel with Castro that the Bacardis viewed as a crusade to defend another expropriated Cuban brand.

The bitter political battles are but one layer of the Cuban story, as Gjelten reveals. The iconic Art Deco tower of the Edificio Bacardi still graces the Havana skyline, a reminder of a wealthy past, while much of the city crumbles. Since Castro fell ill and passed the reins to his brother earlier this year, the post-Castro era is finally within sight. Gjelten raises the perennially fascinating question of whether Cuba's exiles will play a constructive and supportive role in creating the kind of republican government that the country's educated and industrious population has desired for so long. ·

Linda Robinson is author in residence at the Merrill Center for Strategic Studies at the Johns Hopkins School for Advanced International Studies. Her new book, "Tell Me How This Ends: General David Petraeus and the Search for a Way out of Iraq," will be published in September.

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