Diageo enters into deal with Havana Club producer

Diageo’s European subsidiary has formed a joint venture with the state-run Cuban distiller that produces Pernod Ricard’s Havana Club brand for the international distribution of Santiago de Cuba rum.

Diageo Europe and Corporación Cuba Ron have formed a joint venture

The joint venture, called Ron Santiago, is the result of an agreement between Diageo Europe and Corporación Cuba Ron.

The government-run producer has partnered with Diageo’s main rival, Pernod Ricard, on the global distribution of Havana Club rum since 1993. Pernod Ricard controls the brand in all international markets excluding the US, where a trade embargo against Cuba remains.

Ron Santiago will have exclusive global distribution rights to Santiago de Cuba, which will join Diageo’s super-premium Reserve portfolio with a focus on “driving growth in key cities and resorts across Europe”. The brand is also prevented from launching in the US market due to the embargo.

“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 of Diageo GB, Ireland and France.

“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 expands Diageo’s stable of rum brands, which includes international marques Captain Morgan and Ron Zacapa, as well as Cacique, Bunderberg and Pampero, which are mostly available in local markets.

According to IWSR data cited by Diageo, global sales of premium-and-above rum are growing faster than the overall category, up 12% versus 3%. Meanwhile, the premium-plus rum market in Europe recorded growth of 16% in 2018, while total luxury spirits were up 9%.

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.

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.”

He added: “We are looking forward to working with our partners to build the success of this premium rum outside Cuba.”