Global drinks giant Diageo has confirmed the disposal of iconic Irish whiskey brand Bushmills as part of a $400m (€320m) deal to strengthen its presence in the global tequila market.
Reports surfaced over the weekend that Diageo — which owns the likes of Guinness and Baileys, as well as numerous other well-known international drinks brands such as Captain Morgan rum — was nearing agreement with Mexican tequila label Jose Cuervo for control of its Don Julio tequila, in exchange for global ownership of Bushmills.
Yesterday, Diageo confirmed it had agreed terms, which will see it take global ownership of Tequila Don Julio, with Cuervo’s current production and distribution rights for Smirnoff vodka in the Mexican market ending.
The deal also involves the sale of Bushmills to the Mexican company’s international unit. It will result in a net payment of $408m to Diageo upon completion, with a timeframe of early next year anticipated.
Diageo CEO Ivan Menezes said: “This transaction delivers two key objectives for us. We have secured our position in the growing super and ultra-premium segments of the tequila category, and further strengthened our global footprint by expanding our leading position in Mexico, where the growth of spirits has great potential.”
In Diageo’s last financial year, the group’s Irish brands performed well globally, particularly Bushmills, which grew global sales by 7% year-on-year during the 12 months to the end of June.
Colin O’Brien, Diageo’s operations director, said the Bushmills sale represented progress in the group’s overall strategy, but said the whiskey brand was going to a good home after nine years under Diageo’s ownership.
“Bushmills Irish Whiskey is a brand built on great history, heritage, and passionate people and has been a cherished part of the Diageo family for more than nine years,” said Mr O’Brien.
“During this time we have invested over £80m (€104.2m) to build capacity, infrastructure and maturing inventory at the distillery, which has supported the continued growth of the brand.
“We are immensely proud of these achievements, and while we recognise that today’s announcement does represent a change for Bushmills we are confident that Jose Cuervo — a company with a proven commitment to its people and to valuing the history and heritage of its brands — will continue to nurture Bushmills in the future.”
Iconic whiskey brand ‘has gone to good home’ as beverage group takes control of key tequila brand
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