‘Demerara’: a primer on its history and significance in products

Aug 27, 2021 Letters

---

Dear Editor,

I take this opportunity to make a contribution to the recent disclosure that ‘Demerara Rum gets geographical indication recognition in EU’ (S/N 26.8.21).
I begin by stating that Guyana recognised the value of having Geographical Indications many years ago. This was demonstrated when, as a Member of CARICOM, such protection was being negotiated in the context of the WTO TRIPS Agreement, which concluded in 1995, and the negotiations for a Free Trade Agreement of the Americas (FTAA), which were formally launched in 1998. Jamaica was the strongest proponent supporting the use of Geographical Indications as part of their national branding strategy.
In the negotiations, Guyana’s original interest was in recapturing exclusive use of the term ‘Demerara Sugar’.
It was around this time, I began paying a keen interest in foreign trade matters even while I served as Foreign Minister. At the same time, discussions began in Brussels with an EU lawyer, Bernard O’Connor, on how best the term ‘Demerara’ is used on several products from Guyana could be protected in law.
Around 2001, the then Regional Negotiating Machinery (RNM) and the Guyana Sugar Corporation (GuySuCo) began work to determine how ‘Demerara Sugar’ came to be so named and how it came to be regarded in international markets as a generic term. In that same year, having been assigned CARICOM’s Spokesperson on Sugar and responsibility to superintend the negotiations at the WTO, I began working closely on such matters with Nisa Surujbally and Ian McDonald at GuySuCo, as well as with trade specialists at the CARICOM Secretariat and the RNM.
The records would show that the term ‘Demerara Sugar’ appears to have been first used in London. At that time, the United Kingdom had a very high tariff on the import of refined sugar to protect the domestic refiners of sugar in the UK. Much of the sugar arriving from the West Indian plantations was called ‘Barbados Sugar’. Very dark brown, with a strong molasses flavour, it was an unrefined sugar crystallized from the first boiling in the mill, sometimes called ‘Muscovado Sugar.’ The original term ‘Muscovoado’ has its origin in old Spanish and Portuguese words for “unrefined”. That unrefined sugar attracted a very low tariff. Then came the development of the ‘pan evaporation process.’
While serving as Foreign Trade Minister, conversations with experts at GuySuCo advised me that pan evaporation extracted a significantly greater amount of molasses making the sugar, amongst other things, much easier to handle. It appears that the first shipment of sugar processed using pan evaporation, arrived in London from Demerara.
Being neither refined sugar nor ‘Barbados Sugar’, UK Customs were persuaded to create an intermediary tariff band to apply to this new ‘Demerara Sugar’. With the ready acceptance of and consumer interest in this sugar in the UK market, particularly for glazing cakes and sweetening tea at tea houses in London, use of this pan evaporation process naturally spread to other plantations in the West Indies. That particular sugar’s popularity also encouraged some refiners in London to colour some of their white sugar to resemble ‘Demerara Sugar’ in order to meet the rapidly growing demand. This initiated a ‘Trade Description Complaint’ at the London Magistracy.
Experts say the original ‘Demerara Sugar’ got its appearance and its flavour from the residual molasses coating the crystals. Its relatively large crystal size was also favoured by bakers for glazing. However, the records of that Magistracy’s case suggest that consumers in London quickly began to purchase indiscriminately, any yellow crystal sugar labelled ‘Demerara Sugar’. The Magistrate concluded that the term had become generic based solely on the appearance of the product. The dilution of the pan evaporated sugar’s connection with Demerara therefore was the result of the producers’ initial interest in competing with price rather than seeking a premium for a differentiated product, and their delay in defending the origin and description of the product.
As the saga of the sugar’s Demerara connection evolved, it appears that this difficulty was further compounded in the 1970’s when the UK-based Billington Company, sensing a growing demand for high quality natural products, began requesting ‘raw’ sugars for import. With the supply from Guyana not being able to match the demand for ‘Demerara Sugar’, the company turned to Mauritius and introduced them to the methods for producing specialty sugars, including what they described as ‘Demerara Sugar’. With no protest from Guyana, this further diluted Guyana’s claim to exclusive use of the term for this specialty sugar.
On the other hand, Billington’s marketing of specialty raw sugars helped with the differentiation between the colouring of refined sugar and the production of genuine ‘Demerara Sugar’. Around 2004, with the launching of the negotiations for a WTO compatible trading arrangements with the EU, discussions were held between the RNM and GuySuCo on a strategy to recapture the term ‘Demerara Sugar’ to be used exclusively for the specialty sugar from Guyana. There was already an effort to protect the term as a trademark and re-establish the link with Guyana through the use of the term ‘Genuine Demerara Sugar’.
On July 6, 2005, I presented Bill No. 12/2005 entitled ‘Geographic Indications’ in the National Assembly. The Bill was passed on 21/7/2005. It provided for ‘protection for Geographical Indications in order to fulfill the obligations of Guyana under the Agreement on TRIPS of the WTO and related matters’. This was the first but important step. However, protecting the term ‘Demerara Sugar’ as a Geographical Indication required work to be done to identify the unique characteristics of ‘Genuine Demerara Sugar’ and the link between these characteristics and the agro-climatic conditions of its location of production in Guyana. It was quickly recognised that the distinguishing flavour of ‘Genuine Demerara Sugar’ must come from the residual molasses, and that the unique agronomy of cane production in Guyana contributed to this flavour. The RNM, therefore, suggested that the effort to establish Geographical Indication protection should be expanded to ‘Demerara Molasses’ and ‘Demerara Rum’, the latter itself made from ‘Demerara Molasses’. Getting protection for ‘Demerara Molasses’ would support the existing GuySuCo efforts to market ‘Genuine Demerara Sugar’ until they succeeded in recapturing ‘Demerara Sugar’.
Unfortunately, by the end of the EPA negotiations in 2007, the development of the appropriate legal framework and GI product specifications had not been completed by any of the CARIFORUM States. The EU, therefore, agreed to provide technical support for the development of CARIFORUM GIs and the Parties would, in 2014, begin negotiating the future protection of both these and specific EU GIs. GuySuCo, with the assistance of Bernard O’Connor, began looking at alternative legal instruments to provide protection for ‘Demerara Sugar’. In the end, the 2015 elections intervened, and the proposals were not pursued further by Guyana.
In spite of the technical support provided by the EU and the World Intellectual Property Organisation (WIPO), only the Dominican Republic, Jamaica and Guyana have managed to protect certain GIs domestically. The slow pace of the development of other GIs within the context of the EPA has delayed the agreement to provide mutual protection for specific GIs under the EPA. Rather than wait, and with the advice and guidance of Bernard O’Connor, Guyana correctly decided to proceed with what is called a ‘Direct Application’ to the EU for protection of ‘Demerara Rum’. It should be noted that the EU usually gives direct applications greater scrutiny than those to be protected under a negotiated trade agreement. Under the trade agreement, while the GIs are also published for opposition, there is usually a greater reliance on the home State to ensure that the GI meets the criteria for protection. In effect then, in the EU market, the direct grant has a greater assumption of validity.
Guyana is to be congratulated on this successful conclusion of its work over the last few decades. The grant by the EU of GI protection for ‘Demerara Rum’ now allows any local rum producer meeting the product specification located within the defined production area to use the term exclusively. The use of the term ‘Demerara Rum’ by rum producers outside of the defined area, or within the area but not meeting the product specifications is, therefore, now illegal under EU law.
There are three factors that add value to products that consumers know by a term that is protected as a Geographical Indication, particularly in the EU market. First, the term tells the consumer that the product has a particular quality, characteristic or reputation that other similar products may not have. This simplifies the search requirement of the consumer’s purchasing decision. Second, the mark that is used to identify GIs acts as a quality indicator, assuring the consumer that the product will have that particular “quality, characteristic or reputation” that they expect. It also tells them that there is validity in the claim to its origin. An important aspect of this for producers is the need for them to have a code of practice and a control methodology in order to maintain the characteristic and the origin link underlying the GI. Related to the validity of origin is the third factor, viz; the ease with which protection of a GI can be enforced as opposed to trademark protection or protection under trade description legislation. It is the weakness of the latter that allowed ‘Demerara Sugar’ initially to be considered as a generic term.
Because of these factors, for most agricultural and food products, wines, and spirits, EU consumers have been found to be willing to pay a premium on the price of similar products not identified through a GI. On average, this premium ranges from 20 percent to 50 percent although, depending on the product, it can get as high as 140 percent. And it must be recognised that there are products for which a Geographical Indication adds little or no value. As many products known by terms that can be protected as GIs are produced in rural agricultural areas, this price premium being tied to those locations usually provides those producers with greater incomes. Incidentally, the geographical origin connection also allows for a spill-over effect of the premium into other products from the same location, particularly where those products are also quality controlled. The result is that the production and promotion of Geographical Indication products can attract rural investment and have a significant and positive rural development effect.
Guyana should continue to develop its capacity to understand and produce those products known for their unique, origin-linked characteristics by specific terms, and ensure that they protect the added value of using these Geographical Indications. ‘Demerara molasses’ should be next on the list, but other products like ‘Cassava Cassareep’, ‘Wiri Wiri Pepper’, ‘Hosororo Cocoa Sticks’ and many others for which Guyana is well known should also be addressed.

Yours faithfully,
Clement J. Rohee
Former Minister of Foreign Trade and International Cooperation

---

---