28th April 2021
The global rum market is thriving. According to Market Data Forecast, the global rum market was worth $15bn in 2020 and it’s predicted to grow to $21.5bn by 2025. A global rise in popularity for rum is good news for sugarcane producers. But if brands aren’t doing adequate due diligence on their supply chains, they could be buying sugarcane from producers that have poor working conditions, human rights violations and contribute to damaging the environment.
In the Nordic countries, alcohol is sourced by government run monopiles – Systembolaget in Sweden, AS Vinmonopolet in Norway, Alko in Finland, Vínbudin in Iceland, and Rúsdrekkasøla Landsins in the Faroe Islands. Collectively, these monopolies source a wide variety of rum from around 30 different countries. The five monopolies have come together to sign a joint statement on sourcing rum responsibly.
The Nordic Alcohol Monopolies all share the same international Code of Conduct. From this code, one of the sustainability objectives is to align the due diligence and how supply chains are monitored – in line with the UN Guiding Principles on Business and Human Rights.
The statement says, “To ensure decent working conditions, the sugar mills must demand that the plantations they source from have decent conditions and work towards improvement. Thus, addressing potential human rights and labor violations.”
After numerous discussions with their stakeholders, the monopolies found that rum supply chains pose risks of human rights violations such as child and forced labour, poor working conditions, water pollution and heat stress. Sugarcane cutters are at risk of heat stress and developing Chronic Kidney Disease of non-traditional Causes if they do not have adequate access to water and shade or the option to rest during their shift.
To address these concerns, the monopolies are co-operating at international level via amfori BSCI Membership for improvement of working conditions. They have also conducted a risk analysis and received a report created by Verisk Maplecroft in 2019 on the specific risks connected to the rum industry and its supply chain. In addition, they are running a training session in collaboration with Bonsucro and the Adelante Initiative on implementing a water, rest and shade protocol and sanitation to protect workers.
The statement from the Nordic Monopolies commits to collaborate on a broad approach to address the cause and the risks for human rights violations. The approach includes:
- Increased traceability requirements (as already applied for the other product categories) to allow identifying risks.
- Transparent stakeholder engagement with relevant actors in the industry will be promoted by all NAMS, so to assist in identifying, mitigating and remediate human rights violations.
- Providing support to the produces in forms of tailored trainings to mitigate risks.
- Incorporating increased responsible sourcing practices to both mitigate risks but also motivate businesses to have more sustainable practices.
The monopolies have also promised to individually report publicly on their progress.
Bonsucro welcomes this joint statement. As demand for sustainably produced rum grows, so does the demand for Bonsucro membership from rum producers. Since the beginning of 2021, organisations within the rum sector, such as Diageo and Mount Gay Rum, account for more than 25% of all new memberships. In the past year, we have also seen claims for members to use the certified sustainable sugarcane logo as a direct consumer message on their rum bottles.
The letter from the Nordic Alcohol Monopolies helps bring attention to the risks in the rum supply chains. It also serves as a good reminder for rum brands to consider the transparency in their supply chains, assess the risks, start asking questions and undertake due diligence measures.
You can download and read the full report from the Nordic Alcohol Monopolies statement here. A training session on implementing a water, rest and shade protocol takes place on 4 May, find out more here.