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Pernod Ricard welcomes U.S. move on Cuban rum
Published Oct 17, 2016 10:51AM ET
Updated Oct 17, 2016 11:01AM ET
© Reuters. Pernod Ricard welcomes U.S. move on Cuban rum
PARIS (Reuters) - An easing of limits on how much rum Americans can bring back from Cuba for personal use brings Pernod Ricard (PA:PERP) a step closer to being allowed to export its Cuban-made rum directly to U.S. consumers.
Until now American visitors to the island could only take back up to $100 worth of alcohol and cigars. But measures announced by the U.S. government on Friday will ease trade, travel and financial restrictions with Cuba that have been in place for decades.
Pernod Ricard has been waiting for a long time to be allowed to sell its Cuban-made rum in the United States and will be able to do so only when Washington's economic embargo is lifted.
"Pernod Ricard is delighted to learn that the $100 restriction is being lifted and that U.S citizens and travellers to the U.S will be able to bring back ... Havana Club, to the U.S. for personal use from anywhere in the world," the group said in an e-mail to Reuters.
Pernod Ricard, which has been making Cuban rum in a joint venture with the Cuban government since the 1990s, sells around 50 million bottles, or 4 million cases per year, mostly for exports. It has said the U.S. market could potentially bring its Cuban rum extra sales of 20 million bottles per year.
Jefferies investment analysts said in a note: "The changes do not allow for the commercial importation of Cuban rum or cigars, just yet. However a further lifting of sanctions could open the door for Cuban rum to be imported into the U.S for commercial purposes."
The brokerage, which has a "buy" rating on the stock, said: "For Pernod, we estimate that the Cuban rum opportunity could be worth as much as 8 euros per share," referring to the impact of commercial exports if the U.S. were to allow them.
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