Diageo invests $400m in Don Julio

Diageo has confirmed its commitment to Don Julio Tequila by pledging $400 million in its future, with plans to expand production and build a heritage centre in Jalisco.

Diageo acquired the brand last year, trading its Irish whiskey Bushmills for Don Julio from Casa Cuervo in a bid to boost its stake in the global luxury Tequila market.

The agreement will see Diageo receive a net payment of $408 million upon its anticipated completion, which was completed last week.

Today, the brand re-affirmed its long-term commitment to Mexico and Don Julio by pledging to increase advertising and promotional spend to build the brand globally and to expand local production facilities and increasing its agave farming capacity. It also announced plans to build a new heritage centre at Atotonilco, Jalisco.

This planned activity, together with the acquisition costs of Tequila Don Julio, brings Diageo’s expected investment in Mexico to around US$400 million over five years, creating an estimated 200 jobs.

Ivan Menezes, chief executive of Diageo, said: “Mexico is a country of enormous opportunity and will form an important part of Diageo’s future. This investment reaffirms our long-term commitment to Mexico and we look forward to playing a bigger role in the industry, investing in our people and communities and supporting wider economic development.”

Meanwhile, UK’s deputy Prime Minister Nick Clegg welcomed the news during a Mexican State visit to the UK.

“British businesses are booming in Mexico, so I welcome this excellent news from Diageo as President Enrique Peña Nieto begins his state visit to Britain”, he said. “Diageo is but the latest in a long line of UK companies expanding their investments in Mexico. This will create hundreds of jobs and help secure Britain’s place as Mexico’s business partner of choice.”