Diageo ‘rejects CA$28.5m deal’ to buy Crown Royal plant
The mayor of Amherstburg claims Diageo has refused a multi-million-dollar offer to purchase its Crown Royal site in Ontario.
In August, Diageo announced plans to shut its Crown Royal bottling facility in Amherstburg, Ontario, putting 200 jobs at risk. The company intends to shift some of its bottling capabilities to sites in the US and its plant in Valleyfield, Quebec.
Diageo said it would shut the site by February 2026 to improve its North America supply chain.
Reports earlier in the month claimed several alcohol companies had expressed interest in taking over Diageo’s Amherstburg site.
The town’s mayor, Michael Prue, confirmed to The Spirits Business that there are two interested parties in the facility. However, Diageo has allegedly turned down one of the offers.
In a statement last week, Diageo said it had not received any appropriate offers. It also confirmed it would not put the property up for sale until after its negotiations with trade union Unifor had ended.
A Diageo spokesperson said at the time: “Our current focus is on engaging with the union and supporting our employees, and so we do not plan to list the property until after we have concluded negotiations with Unifor.
“However, if prior to that there were to be a potential purchaser with a credible plan to continue operating the facility as a going concern who committed upfront to retain unionised jobs, we would certainly engage in discussions. We have not yet been approached by any such party.”
In response to the drinks giant’s statement, Prue expressed his surprise. “That’s a shock to me that Diageo has said that,” he said. “We are in touch with one particular group. We understand that there’s another one, but they have not contacted the town.”
Prue refused to name the firm he had been in contact with. However, he confirmed it was a “large organisation” that produces spirits and also intends to make alcohol-free beverages.
According to Prue, Diageo requested CA$25 million (US$17.8m) for the site and its equipment, with the unnamed company meeting the offer.
He claims that Diageo returned to the table with a higher sale price of CA$28.5m (US$20.3m), which the anonymous spirits firm accepted. Prue alleges Diageo then turned this down.
When asked for comment about Prue’s claim, Diageo said it had no additional statement to make and referred back to its earlier statement.
Prue adds: “The province of Ontario has had many discussions with this particular company, plus another one. The company is determined to come to Amhertsburg, even if they have to go to another location and bring in their own equipment. We are hopeful they’ll come. We don’t understand Diageo’s reluctance.”
Prue is unsure why Diageo rejected the offer. He also says the union informed him that it has “not heard one word from Diageo”.
“Diageo has not spoken to the union, but that’s the excuse they’re giving for not proceeding with the offer,” Prue claims.
The mayor believes Diageo’s decision to close the site is related to tariffs, despite the firm’s objections.
The closure of the site puts 168 unionised jobs at risk, Prue warns, but he is hopeful that another company will take over Diageo’s plant.
“The good thing about getting another alcohol maker, another alcohol bottler, is that the 168 unionised employers are absolutely skilled and trained,” he explains. “This has been going on for 100 years. The jobs have been passed down from father to son to daughter to grandchildren. Everybody working in the plant has a relative who has worked there. It’s been there for 100 years, and it’s been upgraded many, many times.
“But if you get 168 people that know what they’re doing, if you open another plant, they can start the same day. If you have to train 168 or whatever number of people from scratch, it’s going to take months. And so the [unnamed] company is really desirous to open up and get going before February, because they want to keep those people.”
Diageo faces LCBO delisting
Diageo has faced backlash against its move to shut the site. Ontario premier Doug Ford threatened to “hurt” Diageo and said he would delist Crown Royal whisky from Liquor Control Board of Ontario (LCBO) stores if the closure happened.
“The Liquor Control Board of Ontario is a government corporation,” says Prue. “It is the largest importer of spirits in the world because it buys the spirits for all 20 million people who live in the province of Ontario. The premier has said that if Diageo walks away, he’s going to delist their products in Ontario. That would include not only Crown Royal but Captain Morgan rum, Cîroc vodka, Smirnoff vodka.
“Diageo is a big organisation and that’s what [Ford] said he’ll do. That’s the lever. The town doesn’t have that lever, but the province does.”
Related news
Diageo could sell Crown Royal site
