Sales of Haitian rum gaining ground in the Dominican Republic

While the Dominican rum producers complain of high taxes (60% tax per bottle) and the decline in sales, the commercialization of rum smuggled, especially Haitian grows on the shelves of several traders in the capital. Bottles of different formats and brands like Bakara, Green Label, Maréchal and the traditional Barbancourt, are sold for between 50 to 700 pesos.

These rums have penetrated to such an extent the market that it changed the taste of the Dominicans as confirmed by a trader, who says sale Haitian rum both to the Dominican customers than Haitian.

The Directorate General of Customs (DGA), the Ministry of Industry and Trade and other Dominican authorities note that while every effort is made to prevent the illegal entry of these products, the measures are insufficient, although DGA qualifies the results of the fight against the contraband as "extremely positive", recalling that last year, the DGA had intercepted and destroyed more than 7,500 boxes of alcohol smuggled.

Gregory Lora, Advisor to the Director General of Customs, said that in the border area, the physical infrastructure has been improved, staff are continuously trained and permanent operations are conducted in the fight against illegal trade of alcoholic beverages.

Dominican entrepreneurs claim that unfair competition and smuggling are among the main factors affecting the competitiveness of the Dominican national companies and are responsible for the decline of formal sales.

For his part, Altagracia Paulino, director of the National Institute for the Protection of the rights of Dominican consumers (Pro-Consumer) recently expressed concern at the launch of a campaign against forgery, smuggling and tax evasion of the rum and cigarettes, which aimed merchants and consumers. He said he was aware of the negative impact of these products on health and state revenue "We are very concerned about the entry into the country of certain substances that can harm the health of the population [...]"

However, it should be noted that if the smuggling of Haitian rum is responsible for tax losses for the Dominican Government (which provided no quantitative estimate), the domestic industry also complained of increased tax evasion in the market of rum. Indicating that between January and December 2014 more than 3 million liters of alcohol produced locally, were sold without being told the General Tax Department, an estimated loss for the treasury, of more than 800 million pesos...