Dominican Rum industry faces declining sales

Santo Domingo.- The Dominican Association of Rum Producers (Adopron) has reported a continued decline in the country’s rum industry, as indicated by the latest data from the General Directorate of Internal Revenue (DGII). In 2022, declared rum sales fell by 0.6%, followed by a 4.3% decrease in 2023. The trend has worsened in 2024, with an alarming 9% contraction in sales by August, resulting in an estimated loss of 4 million liters compared to 2021 levels.

Adopron highlighted that 2024 was expected to be a critical year for the industry’s recovery post-pandemic and following the issues related to adulterated alcohol. However, the recent statistics suggest that this recovery is increasingly unlikely. Spokesperson Circe Almánzar cautioned that raising taxes on the rum industry, particularly the selective consumption tax (ISC), could have severe repercussions, potentially driving consumers to the illicit market rather than reducing overall consumption.

Currently, rum is the only national production category not experiencing growth in 2024, facing significant challenges from the ISC. Despite price increases and high taxation, illicit trade remains a persistent threat, especially in the lower-price segment, with over 70% of this segment displaying unjustified prices. Adopron estimates that 55% of brands exhibit illicit practices, leading to tax evasion exceeding RD$200 million annually.

The association expressed concern that this trend jeopardizes both industry stability and consumer health, as people turn to illegal, low-quality products. They warned that illegal operations have become more sophisticated, even counterfeiting premium brands. Adopron has urged authorities to implement measures to combat illicit trade and safeguard both the rum industry and Dominican consumers.