Diageo happy with 50/50 Zacapa deal

30 October, 2012

Diageo has not enquired about increasing its stake in Zacapa, the Guatemalan rum brand of which it owns a 50% share, Drinks International has been told.

Speaking at TFWA Cannes last week, Roberto Garcia Botran - president of the brand’s co-owner and producer Industrias Licoreras de Guatemala - quelled speculation that a takeover by the global drinks giant was imminent. “Diageo has not asked yet – they are happy with the [current] deal,” he said

Diageo completed the purchase of a 50% controlling stake in Zacapa for £150m in July 2011 following the expiration of a three-year distribution deal with the brand.

Zacapa now sells around 200,000 9-litre cases, while Industrias Licoreras de Guatemala’s other brand, Botran, is at about 100,000 case sales per year.

Responding to questions about the future of the family’s eponymous rum brand, the President said Botran had  "emotional" value to the family, although did not totally rule out a sale in the future.

According to Botran the rum grew by triple digits in both 2011 and year-to-date 2012. “It’s growing faster than we expected. The volume is where the money is and we have more demand than we can service.”

Botran noted the contribution of Diageo in raising the global awareness of Guatemalan rums. “It has been a really good deal for the country. The distribution Diageo has is a huge asset [to Zacapa].”

Speaking about Botran he said: “Our strategy is to go to Asia in 2015. If you go to Asia [straight away] and it booms, what do you do? We have to be ready for Asia. It is a huge opportunity.”

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