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The Significance of Rum

Dear Source:
It has become public knowledge that the Swedish government which is the current owner of V. I. Rum Industries has considered the divestiture of its ownership of the rum producing facility. I view this as an extremely serious matter which deserves close scrutiny by the Government of the Virgin Islands.
The rum industry is a most significant segment of the Virgin Islands economy and is currently collateralizing hundreds of million dollars of general obligation bonds for various government activities. For decades, it has funded capital improvement projects (streets, schools and hospitals) as well as contributed to the general fund. I know first hand what this industry means to the Virgin Islands and as Commissioner of Economic Development (1987-1994), I maintained a close working relationship with the fine and dedicated staff of the industry on St. Croix. Mr. Hardy Nelthrop and Marvin Pickering and staff have kept Cruzan Rum on the top of the market with high brand recognition and quality. Cruzan Rum is the envy of rum distillers; it has been proven to be the best on the world market. The Government of the Virgin Islands must be vigilant on the proposed transaction to ensure that the interest of the government is upheld. Any potential buyer must agree to certain covenants such as aging of the product, and most of all, maintaining bulk shipment because this generates the tax revenues which contribute the hundreds of millions of dollars to retire outstanding bond indebtedness. Bulk shipment customers must be maintained and commitments made to ship one hundred percent of the bulk product to the U. S. market so that the tax rebate will benefit the territory. Bottle shipments are important but do not generate the magnitude of revenues as bulk shipments.

Eric E. Dawson, Esq.
Melbourne, Fla.

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