OFT accuses Bacardi-Martini of abusing white rum market position

Bacardi-Martini has been accused of abusing its dominant position in the white rum market by the Office of Fair Trading (OFT).

The rum distiller has been given two months to respond to the OFT's charge that it breached UK competition law by entering into exclusive supply agreements with pubs and bars.

The allegations centre on a deal that Bacardi made with the National Union of Students in 2000. Nussel, the commercial arm of the NUS, agreed a £625,000 three-year sole supply deal with Bacardi whereby student bars may not stock any other brand of white rum.

An investigation began following an individual complaint and an objection from a drinks company. A spokesperson for the OFT said: "The OFT has written to Bacardi setting out why it proposes to find that the company infringed Chapter II of the Competition Act 1998 by entering into a number of agreements requiring pubs and bars, among other things, to sell only white rum produced by Bacardi. Bacardi is the main supplier of white rum in the UK."

Written and oral representations from Bacardi will be taken into account before any decision is made. If found guilty, Bacardi could be faced with a fine of up to 10 per cent of its UK turnover.

A spokesperson from the rum distiller said: "Bacardi Martini (UK) Ltd is disappointed that the OFT proposes to find that the company has breached UK competition law.

"The company has fully co-operated with the OFT throughout its initial investigation and will, of course, continue to do so. However, Bacardi Martini (UK) Ltd is prepared to vigorously defend its position and will be considering its response in due course."

The white rum market is worth more than £160 million a year in Britain.