Will an eased Cuba embargo bring brand opportunities?

Some brands appear to already be benefiting from normalized relations with the Caribbean country. Consumers are warning others to keep their distance.

The political ramifications of President Obama’s Wednesday announcement that the United States would normalize relations with Cuba after more than 50 years of estrangement were immediate: There will be a fight.

Republicans began making plans to reverse course, possibly by withholding funds to open an embassy in Havana, for example. They’ve also considered ignoring requests for negotiations regarding lifting the embargo against Cuba.

That embargo is still in place for now, though the president’s plan does include some eased trade restrictions. That makes the commercial consequences of the new Cuba policy a little less clear than the political ones. Is this a new opportunity for brands?

In a few cases, the answer is already a big yes.

The biggest winner so far seems to simply be an energy drink company that shares a name with Cuba. The Wall Street Journal reported that Cuba Beverage Co.‘s stock shot up 140 percent on the news of normalized relations. The company has a map of Cuba in its logo, but it’s based in San Diego.

The product that sprang to many observers’ minds upon the announcement of more open trade with Cuba was, of course, cigars.

Rob Norris, CEO of cigar retailer JR Cigar, told NBC News that opening up cigar trade with Cuba “would be fantastic, obviously.” Greg Zimmerman, secretary of the International Premium Cigar & Pipe Retail Association, said there are plenty of legal battles ahead, but cigar sellers will have a new promotional angle if nothing else.

According to the new rules, “the U.S. will allow licensed American travelers to import $400 worth of goods, but no more than $100 of which can be tobacco products and alcohol,” Market Watch reports.

That means U.S. liquor retailers could begin importing very small quantities of rum—a drink with a long history in Cuba. (A rum and Coke is officially called a Cuba Libre.)

Rum maker Bacardi, which started in Santiago, Cuba, in 1862, is using the opportunity to tout its Cuban bona fides, though it’s now headquartered in Bermuda.

“Bacardi is proud of its Cuban roots,” a company representative told Fortune. “We have the utmost respect and sympathy for the Cuban people with whom we share a common heritage.”

The company rep also said Bacardi hopes for “meaningful improvements” in the lives of Cubans.

Another drink maker with ties to Cuba, Pernod Ricard, offered this statement to just-drinks.com: “We are encouraged by yesterday’s historic decision. We are pleased for our employees in Cuba, but this is just the start of the normalisation process. We will monitor the situation carefully.”

According to the Associated Press, other industries that could see immediate benefits include farming, travel and energy.

Brands that aren’t benefiting in the immediate aftermath? McDonald’s and Starbucks. Buzzfeed documented the glut of Wednesday tweets in which people joked about traveling to Cuba before McDonald’s and Starbucks swoop in and set up shop.

Topics: PR


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