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Audit into Angostura rum - company using foreign bulk rum in local products for export

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Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Duane 3NE 2NR » December 4th, 2016, 7:33 am

Audit into Angostura rum
CEO sent on leave; company using foreign bulk rum in local products for export


Published on Dec 3, 2016, 9:00 pm AST
By Asha Javeed


THE integrity of Angostura's rum is under audit.

The local rum company has been buying bulk rum from Cuba and South America and simply repackaging it, without substantial chan­ges, and selling it to export markets.

This action is in breach of the European Union's rules of origin with regard to rum blending inte­grity, and raises questions about the company's age claims for its rum blends, according to Board documents from Angostura.

Furthermore, Angostura has also benefited from preferential rates in Caricom markets.

Angostura, a publicly traded company on the Trinidad and Tobago Stock Exchange (TTSE) and owner of the world-famous Angostu­ra Aromatic Bitters, as well as several rum brands which include its 1919 rum, could be fined for its breaches, board minutes have indicated.

Following the discovery by the board of directors, Angostura chief executive Robert Wong has been on administrative leave for two months.

Wong, who has been on leave from the company since September, was officially sent on leave last Thursday.

The Sunday Express was told that Angostura has informed the Secu­rities and Exchange Commission (SEC) and has appointed Genevieve Johan, its executive manager of export and business development, as acting chief executive.

Contacted yesterday, Wong said: “I won't comment just yet. I am not guilty of anything. It's unfortunate. I am not sure what the motivation is. I understand the present board wanted a changing of the guard and we had discussed it, but that action didn't go through.”

Chairman Dr Rolph Balgobin was e-mailed questions on the matter and did not respond.

When contacted by phone, he said he could not yet address those matters in the public domain.

Wong, who has worked at Angostura for over 20 years, took over from Wayne Yip Choy who was fired and later received a $28 million landmark judgment against the company.

Yip Choy was credited with turning Angostura's performance around after the company posted a billion-dollar loss in 2009 because of money owed to it by its parent group, CL Financial.

Before he was appointed chief executive, Wong was executive manager of rum bulk sales.

According to documents received by the Sunday Express, Angostura imports heavy rum concentrate (HRC), which is the initial distillation from sugar cane molasses fermentation, and which has to be further processed and aged before being repackaged and sold.

The company has a rum import licence from the Ministry of Finance.

Integrity of products now in question



“Since the sugar industry was closed, the Government allows you to import rum, process, distil and add local value. The licence allows you to sell in the local market and once substantial value is added, it can be sold to the export market,” an informed source told the Sunday Express.

“What you have here is a Caricom product, labelled and branded as local, being sold when it doesn't originate here,” another source explained.

The issue first came to the board of directors in August when it was asked to sign off on a $16.5 million purchase of heavy rum concentrate to meet its rum production quota for 2016 and early 2017.

The Sunday Express understands Angostura's management could not guarantee the integrity of the products which had been exported over the past few years as it had not been sufficiently transformed during the distillation process.

Further, the management could not guarantee that it had not made false declarations in the export certificates of origins of exports using HRC in its rum blends.

'An illegal act'



According to board minutes of a meeting held to discuss the topic, it was noted, “The board observed that the aforesaid practice amounted to an illegal act and indicated its strong disapproval that management would attempt to ask the board to approve the purchase of the HRC to produce rum intended for export, in breach of the law.”

“The board stated that the non- compliant practice risked an audit that would highlight the trace­abi­lity challenges, expose the breach, resulting in fines, causing: em­- barrassment to the country; decline in brand value; decline in sales; decline in shareholder value and even courting litigation which would cause a further decline in shareholder value,” the document said.

According to the board minutes, if the rum concentrate was not purchased, it could impact negatively on the company, costing it $12.9 million in sales.

“The board noted that this dishonest act to preserve $12.9 million in revenues would have jeopardised far more in brand and shareholder value, and was fundamentally improper,” the minutes said.

The Sunday Express was told PricewaterhouseCoopers (PWC) has been retained to do an audit at the company in relation to these transactions.

Angostura is one of CL Financial's more profitable companies.

According to Balgobin's chairman's statement for the third quarter dated November 4, the company's $458.2 million in revenue for the year to date which was 5.6 per cent higher than 2015, and its sales for the third quarter were $26.6 million over that for the comparative period last year.

“Results from continuing operations of $138.9 million reflect improved performance of $10.4 million or 8.1 per cent over prior year. Profit after tax of $94.1 million was impacted by settlement of a judgment in relation to a non-recurring legal matter which was only partially offset by foreign exchange gains. As a result, the resulting earnings per share of $0.46 was $0.02 (4.2 per cent) below the comparative period last year,” Balgobin said.

Angostura was the jewel in Lawrence Duprey's CLF empire for him to begin his rum dynasty.

That dream died when the two other CLF subsidiaries, CLICO and CLICO Investment Bank (CIB), went bust.
http://www.trinidadexpress.com/20161203/news/audit-into-angostura-rum-ceo-sent-on-leave-company-using-foreign-bulk-rum-in-local-products-for-export

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Gladiator » December 4th, 2016, 7:51 am

Lawd boy... We even running rum racket... What next?

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Sundar » December 4th, 2016, 8:08 am

And look they raise the price ah rum in the budget. . Nooooooooooo

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby gurmuk » December 4th, 2016, 8:09 am

Wdmc....

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby cherrypopper » December 4th, 2016, 8:16 am

Daz y I always getting sick when I drink white Oak

I knew something was wrong

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby pugboy » December 4th, 2016, 8:43 am

it's not really a racket,
rum coming from a cask is a mostly clear colourless AND tasteless liquid

the primary taste ingredients my sources tell me are caramel and prune juice

if you you think that "single barrel" rum was 100% from a singular barrel then think again
it may be 95% bulk rum and 5% "special single barrel" lol

it's actually more like those fruit juices that say "10% real fruit juice"

chocolate industry is identical, consumer chocolate is mainly from ghana
with additional higher quality blended in

I think even car oil companies do similar with all them synthetic oil blends
Last edited by pugboy on December 4th, 2016, 8:46 am, edited 1 time in total.

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Redman » December 4th, 2016, 8:46 am

The issue to me is the brand integrity on the international markets.

If theyve infringed the conventions/rules we have lost a marque name.

Steups.

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Phone Surgeon » December 4th, 2016, 11:34 am

Lolll racket can't done

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby silent_riot » December 4th, 2016, 11:45 am

I am disappoint

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby GixxerMan » December 4th, 2016, 11:56 am

not affected.... i hope they can do more audits of other companies

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby MaxPower » December 4th, 2016, 6:16 pm

Bulk rum is the new word for cocaine

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby supercharged turbo » December 4th, 2016, 6:22 pm

Save the WO

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby rspann » December 4th, 2016, 6:26 pm

Jostiss! What we wah? Jostiss !

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Re: RE: Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby *KRONIK* » December 4th, 2016, 6:52 pm

rspann wrote:Jostiss! What we wah? Jostiss !

*beats white oak bottle with a spoon to this rythmic chant*

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby thelem-again » December 4th, 2016, 6:59 pm

*meh* I don't like nun from dem. Everything from them gets me sick. #notaffected

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby mitch1980 » December 4th, 2016, 7:28 pm

this can have severe repercussions on the company as shareholder investment as well as contractual agreements

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby racedriverpro » December 4th, 2016, 9:23 pm

Oh the CEO name Wong? Them Chinese can't help themselves...

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Hyperion » December 4th, 2016, 9:34 pm

The Angostura brand is synonymous with Trinidad and Tobago internationally, what an embarrassment.

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby skylinechild » December 4th, 2016, 10:54 pm

in on page 1....saving space for further comment later on in time.

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby desifemlove » December 5th, 2016, 12:10 am

Redman wrote:The issue to me is the brand integrity on the international markets.

If theyve infringed the conventions/rules we have lost a marque name.

Steups.

i bet diageo do it too. people still buy johnnie. or kraft (people still buy cheese...) just a slap on the wrist, and not enough to bring the company down.

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Re: RE: Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby DVSTT » December 5th, 2016, 12:26 am

*KRONIK* wrote:
rspann wrote:Jostiss! What we wah? Jostiss !

*beats white oak bottle with a spoon to this rythmic chant*



ahahahaha

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby fouljuice » December 5th, 2016, 5:32 am

Good ting I doh drink dem peasant ting

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby silent_riot » December 5th, 2016, 6:20 am

Angostura's PR department has a lot of work to do.

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby mero » December 5th, 2016, 7:53 am

1919 was a lie?

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby pugboy » December 5th, 2016, 7:55 am

When u hear a fancy name alcohol claiming
Triple distilled in their marketing

It is usually because they buy cheap bulk filler and add it in and then redistill it so nobody can't say it wasn't made there

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby pete » December 5th, 2016, 9:30 am

Hahaha

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby crazybalhead » December 5th, 2016, 9:52 am

*sips ElDo 15*

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby nos_specialist » December 5th, 2016, 1:59 pm

The world branding Trinidad and Tobago as a set of con artists... oh well...if u cant beat them time to join them....

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby Daran » December 5th, 2016, 2:36 pm

nos_specialist wrote:The world branding Trinidad and Tobago as a set of con artists... oh well...if u cant beat them time to join them....


The world don't care about Angostura rum (only bitters). Every grocery or liquor I've been too, be it NY, Miami, Toronto and London carry Bacardi, Malibu, Appleton, El Dorado, Mt Gay and Captain Morgan......but no Angostura.

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Re: Audit into Angostura rum - company using foreign bulk rum in local products for export

Postby SR » December 5th, 2016, 4:54 pm

Blame the us distributor who wants to market it as a high end product... total wines in ft lauderdal use to carry angostura products

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