Diageo enters Cuban rum industry with Santiago de Cuba deal

Marco Green
August 13, 2019

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.

With regard to the US economic embargo against Cuba and the implementation of additional sanctions in recent months, Luca Cesarano, general director of the new joint venture, said Diageo takes all measures to ensure that the applicable regulations are not violated.

"Consumers are looking for new and authentic experiences and working with Corporación Cuba Ron provides a great opportunity to expand our portfolio in segments of the rum category whose growth is being driven by premiumisation globally and in Europe".

Santiago de Cuba is the second largest Cuban rum brand - after Havana Club - and produces four core variants: Carta Blanca, Anejo, 11 Year Old and 12 Year Old.

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).

"More than just a rum, Santiago de Cuba was born in the city where the history and tradition of Cuban light rum originated". Cuban rum brands represent 9% of worldwide retail sales in this growing segment, a percentage expected to increase.

The government-run producer has partnered with Diageo's main rival, Pernod Ricard, on the global distribution of Havana Club rum since 1993.

Under a 1996 law, U.S. citizens can bring legal action against foreign companies profiting from their former property nationalised by the Cuban government after the 1959 revolution.

Cesarano said a subsidiary of Diageo with no ties to the United States was the partner and no company personnel who work with or in the United States were involved in the project or would be in the future.

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.

Other reports by Click Lancashire

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