Don Julio, now owned by Diageo Don Julio, now owned by Diageo.drink spirits

Diageo has plans to grow tequila brand

Spirits maker announces US $400 million investment over five years

Spirits maker Diageo has announced plans to invest US $400 million in Mexico over the next five years.

The company has just completed the purchase of the half of Don Julio tequila it didn’t already own, a deal it made with José Cuervo last fall. Part of the deal gave Cuervo full ownership of Bushmill’s Irish whiskey.

Diageo CEO Ivan Menezes said yesterday, in conjunction with a visit to the United Kingdom by President Peña Nieto, that its spending in Mexico will be designed to grow the Don Julio brand. The amount of the investment includes its acquisition costs (a figure that wasn’t revealed), new production facilities, water treatment, agave farming and a new heritage center in Atotonilco, Jalisco, where Don Julio is based.

Menezes said Mexico “is a country of enormous opportunity and will form an important part of Diageo’s future.” The firm has estimated its investment will create about 200 direct jobs, and about the same number of indirect jobs in the first three years.

In Mexico Diageo is best known for its blended whiskey, Johnnie Walker, of which it sells a million cases a year. Sales of Red Label soared 40% in 2014, partly as a result of a campaign called Keep Walking Mexico.

Worldwide, its most famous brands are Smirnoff vodka, Johnnie Walker, Captain Morgan rum, Baileys liqueur, J&B whiskey, Tanqueray gin and Guinness, the Irish stout.

The company’s general manager in Mexico, Erik Seiersen, said in an interview last week that it is exploring producing more of its brands here along with investing in mezcal. It also plans a big boost in tequila production, from the current 640,000 cases a year to as many as 2 million, which would mean doubling the amount exported.

Source: Press and Journal (en), El Financiero (sp)

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