Britain's beverage giant Diageo signs deal to market Cuban rum

Corporation Cuba Ron S.A. and a subsidiary of the company Diageo signed Monday in Havana the establishment of a joint venture with the objective of boosting Santiago de Cuba rum production. The joint venture will have exclusive rights to global distribution of this liquor.

"This new company is in line with our strategy of investing behind growth opportunities in premium and higher brands.

Working with the Cuba Ron Corporation provides a great opportunity to expand our business and product portfolio", said David Cutter, head of global production and sales at Diageo.

Santiago de Cuba will join Diageo Europe's portfolio of Reserve luxury spirits, building on the premiumisation trend and the cocktail culture.

The premium plus rum segment in Europe is growing faster than luxury spirits as a whole, up 16% compared to the latter's 9%, according to IWSR data.

BRITISH drinks giant Diageo has announced the creation of a joint venture, Ron Santiago SA, between a European Diageo subsidiary and Corporación Cuba Ron SA, a leader in the production of premium Cuban rums on Monday (12). Cuban rums account for 9% by value of the market segment globally.

The joint venture is similar to that under which Pernod Ricard markets Havana Club, another rum produced by the state-owned Corporación Cuba Ron, worldwide. The rum is made in the province of Santiago de Cuba, and holds the protected Designation of Origin Cuba. The brand will not be distributed in the US.

The Trump administration in May allowed Title III of the 1996 Helms Burton Act to take effect, enabling US citizens to bring lawsuits against foreign companies profiting from property taken from them after Cuba's 1959 revolution.

Regarding the implementation of the long-dormant section of the Helms-Burton Act, Luca Cesarano, general director of the new joint venture, said he was confident the company would not be affected.

The Diageo subsidiary and state company Cuba Ron will be equal partners in Santiago SA.

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