How Caroni rum is valued...WTF!

Thanks to JaRiMi, one of the very few honest and rum knowledgable experts about - and an advocate of a Trinidadian style. The rum to cause this category: Scarlet Ibis.
da'rum
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How Caroni rum is valued...WTF!

Post by da'rum »

http://trinicenter.com/Raffique/Sept/caroni.htm

“In order to understand how rums are valued, you need to understand many aspects of the business,” a senior company official told the Independent. “Firstly, we must be the only company in the region that has some rum in casks that are over 25-years-old. Though these are few, they are worth their weight in gold. The company also has a significant amount of 10-to-15 year-old rums, which is also very valuable. And the remaining stock is made up of three-to-five year-old rums, which also have their value.”
The process of blending rum starts with the product one wants to put on the market. Caroni currently has a 15 year-old blended rum, Legend 2000, that was done as a “limited edition”, and which will sell for upwards of $600 a bottle. On the other hand, its three-year-old rums will retail at around $40 for a 750ml bottle.

When rum is blended, the manufacturer uses 20 per cent of pure alcohol and mixes that with distilled water. Of the 20 per cent alcohol, 20 per cent of that comes from the aged stock one wants to market. So, for example, if you are marketing a 12-year-old special, a mere four per cent of the contents (20 per cent of 20 per cent) comes from 12 year-old casks. The remaining 16 per cent is “new” pure alcohol (which does not carry anything close to the value of the aged stocks). And then distilled water is added before the product is bottled and sold.
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Post by Capn Jimbo »

You got my attention!


The key statement: that a 20 year old Caroni rum may only contain 4% of actual 20 year rum, with another 16% composed of what they call "pure alcohol" and rest being distilled water.

Still, this doesn't quite make sense. The article states that 4% is the aged rum (probably 130 proof, 65%) and the other 16% is what they call "pure alcohol". If the latter is GNS (grain neutral spirits) or nearly so, this 16% is is 190 proof/95%. According to the article the other 80% is distilled water.

Let's examine this, say by volume...

1. 750 ml x 4% x 65% = 22 ml alcohol

2. 750 ml x 16% x 95% = 114 ml alcohol

3. 114 ml + 22 ml = 136 ml / 750 ml = 18% (36 proof).

Somethings missing here, and its about 164 ml of alcohol (for 80 proof). Perhaps there is an element of blending (young rum) as well. JaRiMi?
Last edited by Capn Jimbo on Tue Feb 12, 2013 8:27 am, edited 1 time in total.
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Post by da'rum »

I think the author got Spirit mixed up with pure alcohol. I think you'd be spot on with assuming it's blended with young rum.

Their pricing estimates seem rather optimistic as well don't you think?
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Post by Capn Jimbo »

This is one for JaRiMi, an expert on Trini rum and history...


The article you cited is a must read, and is really about the valuation of old Caroni stocks, which Angostura is trying to buy. Caroni apparently has extremely valuable and rare old stocks of rums up to an honest 25 years in the barrel, reportedly about 18,000 casks - a lot of top quality aged rum. The article reports a valuation of one to six billion dollars, based on the blending of this rum with ordinary stock, estimated to be sold at $40 bottle, and/or with limited releases of the 15 to 25 year olds at super-premium prices (which they can get) up to the article's estimate $600 bottle.

This is not a minor difference of opinion.

The Prime Minister is implied to be in bed with Angostura, who values the 25 year old stock as if it would be sold undiluted or unblended at $25 per bottle. Thus Angostura's first offer was a pittance - $13 million - an offer they raised to the still small sum of $35 million in response to the outcry. The real argument here is fair evaluation and Angostura is trying to pull a Diageo with their faithful Prime Minister lackey, as Diageo has done with the USVI. This is where the article tries to show the dilution or blending of the stock to calculate what they call "intent of product", ie actual use and retail value of the product.

The article is absolutely right in this: the rare rum is probably worth, as they estimate, $1 to $6 Billion. Angostura must be blowing the PM if he is truly considering their puny attempt to steal the rum.

JaRiMi?
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Post by da'rum »

Written by Trinidad and Tobago Express
Saturday, 11 October 2008 22:25

Sale of Caroni (1975) Ltd rum stock by auction was aborted yesterday two hours after the auction started. There were no bids following the announcement by auctioneer Edward Soon that bidding would have to start at $7.8 million.

The auction was to have been held at Rum Distillers of Trinidad and Tobago (RDTT), Old Southern Main Road, Caroni, at 11 a.m. RDTT was set up after Caroni got out of sugar production in 2003, to sell rum manufactured by the company. RDTT has since closed its doors and handed over the sale of its remaining stocks to certified auctioneer Soon.

Sale of the rum stocks was advertised on September 16 and included bulk rum in 5,388 casks in various types and aged from three to 19 years old, bulk rum in vats measuring 60,000 litres and 2,860 cases of bottled rum. Registered buyers questioned the quantitative loss in quantity since the last inventory, ten months ago before the start of the auction.

RDTT’s chief executive officer, Rudy Moore, assured the buyers that the quantity received would not be less than 92 per cent. He said that the base price had taken into account loss by evaporation of four per cent. Moore said that an inventory was done last year and loss by evaporation would not exceed eight per cent.

Colombia rum merchant Arthur Fernandes questioned the terms of sale which included a 15 per cent Value Added Tax, Custom Duties, a buyer’s premium of 10 per cent on the final bid, stock insurance, transportation and handling charges. He called for clarification on the terms of sale, which he said were not clearly stated.

’An inventory of the stocks must be made by the potential buyers. We do not know whether we are buying rubbing alcohol or 100-year- old alcohol,’ he said.

Registered buyers also questioned the buyer’s premium of 10 per cent which when added to a seller’s fee would give the auctioneer close to $1 million. San Fernando businessman Alec Elias said the minimum reserved price, the buyer’s premium and the conditions of sale were unrealistic.

A registered buyer asked the auctioneer to start the bidding with his offer of $750,000 and heard another offer of $1 million carried to $1.5 million before the auctioneer took control and put an end to the unauthorised bids. He announced that the auction was aborted. Angostura Ltd’s Robert Wong said the minimum reserved price was way above what buyers were prepared to pay.

’It is a risky business and RDTT is not offering a good business deal,’ he said.

He said Angostura was interested in investing as a 49 per cent stakeholder in RDTT when it was set up but the deal fell through. The company also made several offers to buy the rum stock, he said adding that RDTT wanted too much money for the stock. Wong said that buyers walked with certified cheques and were serious about purchasing the stock.

’A minimum reserved price of $1 million is what most of us expected,’ he said. Not a reserve of $7.8 million.

Trinidad & Tobago Express
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Post by da'rum »

Just some pics to add to the thread, how much would you pay for these 60-70 year old bottles

Image

Image

Image
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Re: How Caroni rum is valued...WTF!

Post by JaRiMi »

da'rum wrote:http://trinicenter.com/Raffique/Sept/caroni.htm

“In order to understand how rums are valued, you need to understand many aspects of the business,” a senior company official told the Independent. “Firstly, we must be the only company in the region that has some rum in casks that are over 25-years-old. Though these are few, they are worth their weight in gold. The company also has a significant amount of 10-to-15 year-old rums, which is also very valuable. And the remaining stock is made up of three-to-five year-old rums, which also have their value.”
The process of blending rum starts with the product one wants to put on the market. Caroni currently has a 15 year-old blended rum, Legend 2000, that was done as a “limited edition”, and which will sell for upwards of $600 a bottle. On the other hand, its three-year-old rums will retail at around $40 for a 750ml bottle.

When rum is blended, the manufacturer uses 20 per cent of pure alcohol and mixes that with distilled water. Of the 20 per cent alcohol, 20 per cent of that comes from the aged stock one wants to market. So, for example, if you are marketing a 12-year-old special, a mere four per cent of the contents (20 per cent of 20 per cent) comes from 12 year-old casks. The remaining 16 per cent is “new” pure alcohol (which does not carry anything close to the value of the aged stocks). And then distilled water is added before the product is bottled and sold.
not cool.
I think a couple of key points are missed totally here from this 13-year old article...You should change the thread name to "How Caroni rum WAS valued" - back in the year 2000. You do know that they are NOT talking US dollars here - but Trini dollars..right?

1 Trinidad dollar = o.15 US dollar.

This article was written to showcase the point, that due to local political pappyshow & populism, the then T&T government wanted to shut down Caroni distillery, and then wanted to sell off the rum stocks for close to nothing to Angostura and other buyers, while bagging money to their own pockets in the background as bribes. Angostura wanted to buy Caroni stocks (as did many others) because

1) they lacked old rum stocks, and

2) also lacked the varied styles of rums that Caroni was able to produce, with their many different types of stills (pot stills, really old column stills of varied design, etc).

Others did too. Trini govmnt on the other hand didn't really care how much of that money went into govmnt treasury - they more cared about how much they could pocket themselves. To get the rum sold, they hired an American evaluator - from a company that ALSO wanted to buy Caroni rum stock. Guess if the man is unbiased? I think not...

http://trinicenter.org/Raffique/2001/Mar/092001.htm

Quote: "A consultant hired by Caroni's board in early 2000, Thomas Fuchs, put the value of the distillery as an ongoing operation at TT$935 million (100+ million euros).

Caroni's own balance sheet as at June 30, 2000, showed where Rum Distillers could make at least TT$500 million (54 million euros) in profits over the next 10 years, provided certain changes were made in blending and marketing its rums.

However, following the row that erupted, the Secretariat engaged the services of the Main Rum Company (MRC) of the USA to value the stocks and they came up with a figure of TT$20 million (2.1 million euros)."


A helluva difference - 100+ million euros, versus 2,1 million euros - yeah? WHY??

""What was not said," Jai Ramkissoon, president of SISA, one of the unions, told the Independent, "was that the Main Rum Company purchases bulk rums from Caroni, so it was in MRC's interest to under-value the stocks."

Ahhh....seen?

The last bit of Caroni rums was to be auctioned in 2008. This...

"included bulk rum in 5,388 casks in various types and aged from three to 19 years old, bulk rum in vats measuring 60,000 litres and 2,860 cases of bottled rum. "

What the article says about blending & blended rum can be true -often is not. I think Raffique got it totally wrong here - he is a trade unionist, a news writer - not a rum expert. But as we already know, in rum trade (not just in Trinidad, but elsewhere too), the age statements DO NOT MEAN that the age marked is the youngest distillate - it can be the oldest too - or in case of Zacapa, completely invented figure.
Last edited by JaRiMi on Tue Feb 12, 2013 5:29 pm, edited 1 time in total.
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Post by JaRiMi »

Capn Jimbo wrote:You got my attention!


The key statement: that a 20 year old Caroni rum may only contain 4% of actual 20 year rum, with another 16% composed of what they call "pure alcohol" and rest being distilled water.

Still, this doesn't quite make sense. The article states that 4% is the aged rum (probably 130 proof, 65%) and the other 16% is what they call "pure alcohol". If the latter is GNS (grain neutral spirits) or nearly so, this 16% is is 190 proof/95%. According to the article the other 80% is distilled water.

Let's examine this, say by volume...

1. 750 ml x 4% x 65% = 22 ml alcohol

2. 750 ml x 16% x 95% = 114 ml alcohol

3. 114 ml + 22 ml = 136 ml / 750 ml = 18% (36 proof).

Somethings missing here, and its about 164 ml of alcohol (for 80 proof). Perhaps there is an element of blending (young rum) as well. JaRiMi?
I think the article, which was written by a very adept newspaper writer, trade union activist and political commentator Raffique Shah got it totally wrong. He is not a rum maker, just a political journalist.

In any case what he was trying to discuss here are the old blended rums bottled more than 13 years ago under the label of Caroni, in Trinidad. These are all gone, I've got some of them, and I can already say Raffique's explanations are a mistake in understanding what the blenders have told him.

What he is trying to say in a very onfused and misguided way, is that AT THAT TIME, the old Caroni blends, BOTTLED (not the ones in cask), did not use the youngest distillate in their age statements. Only some of the rum was as old as 15-years old - the rest was younger. Thats all. Now that is common in rum, right? It is, unlike in whisky, where the youngest distillate is marked on the label on the bottle.

So - it has nothing to do with CASKS of Caroni. It has nothing to do with CURRENT CARONI BOTTLINGS, none of which are done by the Caroni 1975 ltd company, which was closed down in 2001 in Trinidad.

None of you have probably seen these old Caroni bottlings, which Raffique was talking about in that 13-years old article. Here's a picture:

Image

I have tasted these rums. I can tell you that the rum mixed with the 15-years old stock in these bottles has NOT been neutral spirit diluted. These bottles contain a blend of rums of varied ages. I think Raffique also got it wrong between pot still and column still rums, he probably understood that all the column still rum is "neutral spirit".

Where he is 100% right is that the whole closure of Caroni was one, big political show...and corruption rampant. And populism...well, there are still a number of Trini politicians who oppose sugar cane cultivation on the island because it reminds them of slavery...Very little to do with modern economics, huh?

And please remember - the dollars you are seeing quote are NOT $US, they are $TT - meaning that the $ 600 (Trini dollars) quoted int he article equals $US 92.
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Post by da'rum »

Thanks mate.

Good information and you're were right I did automatically think they were talking U.S dollars.
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Post by JaRiMi »

da'rum wrote:Thanks mate.

Good information and you're were right I did automatically think they were talking U.S dollars.
No worries!!

Raffique is a good writer, but a rum-man he is not..!

Like said, he is trying to explain the old habit of blended rums, that they make an age-statement, but very little of the rum is actually that age.

As far as bulk rum, Caroni rum is in Angostura, Borgoe, and a zillion other brands too (or was, maybe not so much any more). Bacardi etc....they are brands. Where all the rum comes from, they do not want to tell. Funny how "Zaya" changed country of origin? Nope.

A rum brand can be made anywhere, from bulk rums. Another option is to trade molasses, and I am sure Brazilian molasses gets into many rums these days, as cane growing isn't as common on the islands as it once was.
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Post by JaRiMi »

Here's some great Caroni rums:

Image

The tall gentleman on the label of the 3rd bottle from the left is Mr. Rudy Moore. He was in charge of liquidating the final Caroni stock. Mr. Moore is a great person, kind and a real gentleman, whom all rum folks have tremendous respect for. I owe him much indeed personally, and hope to repay one day.
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Post by AK9 »

Brilliant post..

So before 1980 Caroni was using the copper still and the Esperanza still?
And in 84 they replaced the non-used stills (cast iron/Wooden coffee) with a Blair stills and a pot still?
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Post by JaRiMi »

AK9 wrote:Brilliant post..

So before 1980 Caroni was using the copper still and the Esperanza still?
And in 84 they replaced the non-used stills (cast iron/Wooden coffee) with a Blair stills and a pot still?
Stills mentioned:

- Cast iron still (1918)
- Wooden Coffee still (1943)
- All copper still (1945)
- Esperanza estate single column still (1957)
- 4x Column Gerb Herman still (1979-80)
- 2x Blairs Still (1984) and
- pot still (1984)

In 1984, the wooden coffee still and the iron still were replaced (I take it this means totally taken out of production) by a (copper) pot still, and a 2-column Blairs still. So before 1980 I take it they used all stills purchased prior to that - at different times, probably with a lot of variance - main production moving to more modern stills as they got them, but making some of the other types at times also.

The oldest independently bottled (and these were tropic-matured in Trinidad, casks coming directly to Velier and later to Bristol from the distillery) Caroni I have seen was made in 1974. What was in the cask? Could have been even a mixture of different styles of rum - when casks go too dry, sometimes they just combine several in together - or they are even recasked completely.
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Post by AK9 »

Besides the stills and the type of rum (heavy/light) is there any other way to differentiate the output?
For example how can they make it more peaty/medicinal?
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Post by AK9 »

JaRiMi do you know anything about the Providence Estate from Trinidad?

From Google it looks like this is a Caroni but cannot understand why it is labelled as Providence Estate instead?
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