The Nicaraguan Rum Association, which has a representative in the United States, convened a meeting to address concerns regarding the gradual depletion of international Nicaraguan rum sales. The...

The Nicaraguan Rum Association, which has a representative in the United States, convened a meeting to address concerns regarding the gradual depletion of international Nicaraguan rum sales. The depletion is primarily due to several companies selling imitation lower quality rum. Further, Nicaragua is trying to recover from a financial crisis and the rum producers constitute a substantial taxpayer base. There are still some distributors, primarily in the United States, who cater to loyal customers—customers who can tell the difference between Nicaraguan and other rum—but the market is not expanding.

The solution advocated is a revision of the rum prices in order to ensure that the industry continues to exist. Per the new price list circulated, the average increase in the price of Nicaraguan rum sold internationally is around 10% of the original price. The justice department in the U.S. brings a motion against the Nicaraguan rum producers, alleging a breach of the Sherman Act. The defendants file a motion to dismiss the indictment, arguing that the United States lacks the jurisdiction to prescribe over the activities of the Nicaraguan Rum Association and its members, which all took place outside of the United States. Is this true? Discuss.