Diageo signs up premium Cuban rum

A European subsidiary of British beverage giant Diageo Plc signed a joint venture deal with state-run Cuba Ron SA on Monday to market Santiago de Cuba Rum, in defiance of USA efforts to dissuade investment in the Communist-run country.

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

Cuban rum brands account for nine per cent of the retail sales value of this growing segment globally.

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

Juan Gonzalez Escalona, President of Corporación Cuba Ron SA, said: "Santiago de Cuba was born in the city where the history and tradition of Cuban light rum originated".

Described by Diageo as "the second-largest premium Cuban rum", Santiago de Cuba has four core variants: Carta Blanca, Anejo, 11-year old and 12-year old.

Santiago de Cuba expands Diageo's stable of rum brands, which includes global marques Captain Morgan and Ron Zacapa, as well as Cacique, Bunderberg and Pampero, which are mostly available in local markets.

The Trump administration in May allowed Title III of the 1996 Helms Burton Act to take effect, enabling USA citizens to bring lawsuits against foreign companies profiting from property taken from them after Cuba's 1959 revolution. Cuban rum brands represent 9% of worldwide retail sales in this growing segment, a percentage expected to increase.

"Neither the Diageo subsidiary firm that signed this agreement, nor the joint venture itself will work with any of the Diageo subsidiaries or companies that operate or are based in the United States or with citizens of that country", said Cesarano.

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