Cacique Guaro, A Tarnished Brand?

Cacique Guaro is the “guaro de los Ticos”. At least it once was. The brand was also the “star product” and the financial flow of the Fábrica Nacional de Licores (FANAL) – National Liquor Factory – and that kept afloat its parent company, the state institution, the Consejo Nacional de Producción (CNP) – National Production Council.

The Cacique Guaro is a sugar cane liquor of high purity and is, was, the best selling distilled spirit in Costa Rica. As it has a neutral taste, guaro can be consumed pure or combined (‘ligado’ in Spanish) with any natural or artificial mixing, such as soda.

The product was conceived in 1853 by the FANAL, produced and sold in barrels to agencies, which in turn placed it in bars and other outlets in the containers provided by clients. The alcohol content was 35°.

Since August 1980, FANAL has marketed the liquor in a one-liter glass bottle with a low ABV of 30° and since then is sold under the name of Guaro Cacique (with a red label). Cacique is also available in 750 ml (glass) and 365 ml (plastic) bottles often called “Pacha”.

The Cacique Superior (with black label) is 35 abv/70 proof. Its design is based on high purity rubbing alcohol and subjected to further purification, in which the liquor is filtered through activated carbon to increase its purity and perfect its aroma.

The guaro in Costa Rica is associated with the name Cacique, that the indigenous society refers to the leader of the tribe and sometimes called “Cuatro Plumas”, for the four feathered Indian Cacique on the label. Even though the real name is “Guaro Cacique”, people in Costa Rica just call it “Guaro”.

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But is Guaro Cacique still the “guaro de los Ticos”?

According to figures, sales have dropped. Big time. The star product sales went from 1.6 million boxes of 12 liters, in 2000, to 450,000 a year now (a decrease of 72%).

This situation has further depressed the plummeting finances of the CNP, which to rescue its finances is betting on a new product, ethanol.

The CNP is pitching ethanol to the Refinadora Costarricense de Petróleo (Recope) – Costa Rican Refinery – to be used in more environmentally friendly fuel.

“Diversification must be. If we do not transform, we disappear. The main support of the CNP is FANAL. If FANAL depends on a product (guaro Cacique) that is disappearing, leaving or in a lesser market, we get into trouble. We have to have the vision to diversify FANAL to continue giving support to the programs of the CNP “, indicated Rogis Bermúdez, president of the CNP.

But why have sales fallen so much?

According to data from the Policía de Control Fiscal (PCF) – Tax Police – it is contraband. The PCF reports the seizure of contraband liquors went up. For example, in 2010, 15,000 liters were confiscated; in 2016 that figure increased to 285,000 liters.

Another problem is that since 2017, Guaro Cacique ceased to be an export product due to a decision of the CNP Board of Directors. The decision was taken after a criminal investigation was opened to determine if there were irregularities in granting discounts and exports of the product.

The state company also blames the creation of “diverse legislation related to the scope of the establishment of laws on liquor-soft drinks-beers; as well as complementary guidelines of the Tax Administration Code,” that caused a significant detriment in Fanal’s competitiveness.

In 2017, the CNP recorded a loss of ¢5.1 billion colones: ¢1.9 CNP and ¢3.2 FANAL.

At stake are the jobs of 420 people which depend on the central government shoring up CNP finances, diminishing over the years as the government faces its own financial problems.

For example, in 2014 the CNP received a financial injection of ¢7.9 billion, while in 2017, only ¢200 million.

According to Bermudez, the FANAL has a capacity to produce 10,000 liters of ethanol daily, which would allow them to put their entire plant to work, which currently is working at half capacity or stopped 50% of the time, depending on your point of view.

If you have followed this story so far, you are wondering why doesn’t the FANAL diversify, why depend on one brand or product?

Which bring us to the real problem of this state-run operation.

The Cacique brand represents only 26% of the FANAL production, the other 74% is focused on the production of antiseptic alcohol, alcohol for the Costa Rican Social Security Fund (CCSS), the state medical service, some creams such as Perfect Love, Mint and Triple Sec, flavorings and the drink known as “chiliguaro”.

Can you guess what the real problem is?

Drink up. Next time you are in the grocery store, pick up a box of guaro. At the local watering hole, don’t order a Johnny or Jim, get a guaro instead.

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