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Diageo signs up premium Cuban rum

Published:  13 August, 2019

Diageo has formed a 50/50 joint venture with Corporación Cuba Ron which gives it exclusive global distribution rights to Cuban rum brand Santiago de Cuba.

The joint venture will be known as Ron Santiago.

Santiago de Cuba was founded in 1862 in the city after which it is named. It is the second-largest premium Cuban rum after Havana Club and has four core variants: Carta Blanca, Anejo, an 11-year old and a 12-year old.

Dayalan Nayager, managing director, Diageo GB, Ireland and France, said: “The joint venture with Corporación Cuba Ron is in keeping with our strategy to invest behind growth opportunities in premium and above brands.

“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.”

Juan Gonzalez Escalona, president of Corporación Cuba Ron, said: “We are proud to announce the creation of this joint venture, which will bring the award-winning Santiago de Cuba to consumers around the world.

“More than just a rum, Santiago de Cuba was born in the city where the history and tradition of Cuban light rum originated. It is an expression of its people and part of our Cuban tradition and 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. 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 brand will not be available for sale in the US where Cuban rums are banned.

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

Diageo is confident it will not be liable because the joint venture involves one of its European subsidiaries.

Luca Cesarano, general director of the new joint venture, told a press conference in a Havana: “Neither the subsidiary of Diageo which is the partner, nor the venture, will interact with any Diageo entity or person that interacts with the United States,” Reuters reports.