30.06.2017

#nofilter: Supply chain of rum under scrutiny

Rum’s path from sugar cane plantation into bottle and store shelves is long and complicated. The information received about primary production in the supply chain is worrying.

Creating transparency into the supply of drinks is made difficult by the long international supply chains that branch into several different directions. Often the products end up on the consumers table through a number of middlemen. Even when there’s a will there is not always a way to thoroughly investigate where the ingredients of the end product originate from.

A typical rum supply chain consists of many different tiers and the raw ingredients are sourced from multiple primary producers. Traceability becomes even more cumbersome due to, among other things, complicated ownership arrangements. Everything begins at the sugar cane plantations where sugar cane is harvested to be sent to sugar producer. Sugar producer presses juice out of sugar cane or produces molasses out from residues. Molasses are widely used as raw ingredient in other than so-called agricole rums. Before the molasses end up at the distillery there may be a middleman, a raw ingredient broker that sells molasses to distilleries. From the distillery the product may continue directly to the producer’s own or a licensed bottling factory. Another ordinary arrangement is that distillate is sold from the distillery through various middlemen. These agents may provide services from freight between markets to mixing distillates and bottling; or to sell their refined rum mixes to brand owners, who handle the bottling and selling to importers. Finally, rum is purchased to Alko from the importers.

As there are so many tiers it is challenging to verify where the raw ingredients of rum come from. Nevertheless, achieving clarity to this is elementary because the ethical problems present in the rum industry take place specifically in the primary production at the sugar cane plantations.

Workers’ rights are not always fulfilled at the plantations

Sugar cane plantations have received negative attention especially due to their inferior working conditions. The problems at the plantations concern excessive working hours without due breaks, and wages that do not cover local cost of living. Particularly worrying is the information that workers are getting ill as a result of the bad working conditions. Several research reports show that long term exposure to bad working conditions in hot and humid climate without proper breaks for hydration may lead to development of a kidney disease. Without treatment this disease can even be fatal.

Harvesting sugar cane is physically taxing and working long hours often in temperatures as high as 38˚C without sufficient hydration can lead to severe dehydration. It is problematic that even when workers do go for a water break there often is not enough water available. Workers also cannot carry with them big enough quantities of water from their homes to be prepared for a day’s need. Further, work on the plantations if often piecework paid which does not motivate workers to take the necessary breaks. Long term jobs in these conditions may lead to the development of the kidney disease.

The basic rights of workers are not fulfilled in these conditions. They rarely have a possibility to influence the situation as employers may threaten with losing one’s job if a worker wants to participate in labor union activity. Change should be achieved on government level in the production countries. Corruption has, however, lead to the governments being unwilling to tackle the problems of rum industry. Additionally, big corporations seem to be partial owners of production facilities through both front companies and subsidiaries. Even if this does not inevitably make the operations or their underlying reasons unsustainable the risk can be greater that these companies drive securing the production and profit maximization ahead of other issues.