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news you can booze

Trading Up: Diageo Picks up Premium Tequila by Bumping a Whiskey

Posted by Mark J. Miller on November 3, 2014 01:30 PM

Diageo, the world’s largest liquor distiller, has agreed to sell the 406-year-old Bushmills Irish whiskey to Jose Cuervo Overseas and spend $408 million so that it can have full ownership of Tequila Don Julio, which it had only owned half of previously. Don Julio is the market leader in ultra premium tequila, and Diageo has decided to go all in on riding the brand to higher revenues. 

Don Julio joins Diageo's robust roster of spirits which includes Johnnie Walker, Crown Royal, Smirnoff, Ketel One, Baileys, Captain Morgan, Tanqueray and Guinness.

“It’s a sensible deal,” Eddy Hargreaves, an analyst at Canaccord Genuity, told Bloomberg. “They do get control of one of the few major tequila brands globally, which is something they’ve been trying to achieve for a number of years.”

Bloomberg also reports that Diageo isn’t planning to revive talks with Jose Cuervo to buy the Cuervo tequila brand, something that was alive back in 2012.

This acquisition is part of Diageo’s larger plan to put more effort behind more expensive liquor products in order to increase its profitability. A bottle of Don Julio can cost as much as three times as much as a Bushmills. Don Julio brought in $167 million in the last fiscal year while Bushmills, the third largest Irish whiskey brand, pulled in $91 million

Though the deal won't be complete until next year, Diageo is confident that the market for ultra premium tequila will thrive. “We have secured our position in the growing super and ultra-premium segments of the tequila category and further strengthened our global footprint by expanding our leading position in Mexico where the growth of spirits has great potential,” Chief Executive Officer Ivan Menezes said in a statement, an observation echoed by Management Today which notes that Mexico's growing middle class is a prime target for tequila brands. 

In another indication that the whiskey world is changing: a Japanese whisky, Yamazaki Single Malt Sherry Cask 2013, was named the best in the world for the 2015 World Whiskey Bible, the Telegraph reports. This is the first time in the book’s 12-year history that a Japanese whisky has taken the top spot.

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[Image via Diageo]

cocktail hour

All the News You Can Drink: AB InBev Gets Modelo, Chipotle's Premium Margarita, Bud's Bowtie and more

Posted by Mark J. Miller on April 19, 2013 06:37 PM

AB InBev Finally Making Deal With US Over Modelo

Anheuser-Busch InBev NV, which controls close to 19 percent of the globe’s beer market, has been trying to buy Mexico’s Grupo Modelo SAB, which owns close to 3 percent of the world’s beer market, for months now, only held up by the pesky US government, which thought the merger could mean too much power for AB InBev. 

The two sides have been talking since at least February about how a deal might be structured so that everybody gets what they want. And now, just days before the two sides were requested to report to a US District Judge, the word on the street is that they have come to an agreement, Bloomberg.com reports.

In order to have this merger occur, Modelo will have to “sell control of all its brands in the US, as well as a brewery it built in Piedras Negras, Mexico, to Constellation Brands (STZ), a winemaker and drink-distribution company,” Bloomberg reports. As part of the new agreement, InBev “gave up an option to buy back a stake in Crown Imports LLC, the US distributor of Corona and the other Modelo brands.” Crown will end up being owned by Constellation.Continue reading...

brand news

In the News: AA/US Airways, AB InBev, Heinz to Buffett, Time Inc. and more

Posted by Shirley Brady on February 14, 2013 08:45 AM

In the News

American Airlines and US Airways to create the world's biggest airline with $11 billion union.

AB InBev will sell Corona unit to salvage Modelo takeover, as Pernod Ricard is open to Jose Cuervo talks.

H.J. Heinz Company enters agreement to be acquired by Warren Buffett's Berkshire Hathaway.

Time Warner rumored to eye Time Inc. split and talking to Meredith about buying magazine brands.

Adidas unveils new global brand strategy with Boost product push.

American Express and Yahoo accused of stealing travel service idea.

Angry Birds parent Rovio slings into advertising.

Apple promises to fix iOS Exchange bug, fights activist shareholder Einhorn.

Barclays agrees to stop speculating on food prices.

Barnes & Noble warns of lower 2012 sales and Nook concerns.

Boeing looks at interim 787 fixes.

BT sticks by Olympic athlete Oscar Pistorius (charged with murdering his girlfriend), for now.Continue reading...

brand and bottle

Tequila Talking Bid: Diageo Eyeing Beam Now That Jose Cuervo Off the Table?

Posted by Mark J. Miller on December 11, 2012 02:11 PM

Diageo already produces a veritable Amazon of alcoholic brands – Smirnoff, Johnnie Walker, Bailey's, and Guinness to name a few — but the drinks giant is still not satisfied.

Reuters reports that the world’s largest spirits maker was in talks to purchase the world’s best-selling tequila maker, Jose Cuervo, but those talks have concluded without an agreement. Don’t think Diageo is done, though. The pullout “fuelled speculation that” Diageo will now go after buying up Beam Inc., which produces the world’s second-best-selling tequila, Sauza, and of course its iconic Jim Beam brand in addition to Maker's Mark and Knob Creek bourbons.Continue reading...

brand news

In the News: Virgin Atlantic, HSBC, Diageo and more

Posted by Dale Buss on December 11, 2012 08:57 AM

In the News

Delta buys 49% of Virgin Atlantic, as Virgin's Aer Lingus hookup mocked by Ryanair and Branson bets on future of the brand. American Airlines, meanwhile, says decision on pursuing US Airways merger is coming soon.

HSBC to pay record U.S. penalty on money laundering.

Diageo terminates talks on "future" of Jose Cuervo.

AIG shares yield $7.6 billion to U.S. government, boosting taxpayers' overall profit to nearly $23 billion.

AOL postpones premiere of hip-hop-inspired TV ad.

Boeing faces revived concerns about 787.

Burberry launches Christmas events and global review.

Burger King expands digital marketing.Continue reading...

brand news

In the News: Oprah, Chrysler, Zynga & more

Posted by Dale Buss on May 25, 2011 09:00 AM

In the News

AIG raises $8.7 billion.

Amazon launches $164 Kindle 3G with ads, as B&N unveils $139 touchscreen Nook.

Apple passes 500,000 unique app offerings in its U.S. store.

Bharti Walmart expands wholesale stores.

Bob Dylan turns 70.

Boeing weighs options for new planes.

British Airways develops Windows 7 mobile boarding app.

California Pizza Kitchen agrees to buyout offer.Continue reading...

brand news

In the News: AT&T, Tepco, Disney and more

Posted by Dale Buss on March 21, 2011 09:00 AM

In the News

AT&T explained why it's shelling out $39 billion for T-Mobile to create America's biggest wireless carrier in a conference call this morning (WSJ.com has more) while Sprint is "left scrambling" and JPMorgan trumps Goldman Sachs with deal.

Japan food brands face consumer fears of contamination as Tepco nuclear plant situation continues. Sony and Nissan are also resuming operations, while YouTube promotes a video people-finder to aid search and rescue efforts. Swiss Re estimates Japan claims at $1.2 billion.

Berkshire Hathaway seeks more big acquisitions — but not technology

Boeing launches newest 747 on its maiden flight.

Diageo is reportedly weighing a $2 billion bid for Jose Cuervo.Continue reading...

brands under fire

Patrón Ignores 1800 Slam. Big Mistake.

Posted by Abe Sauer on September 28, 2010 11:35 AM

Anyone who has watched the first few weeks of NFL football games has seen the ads for 1800 Tequila. "What can your top do?" accusingly asks Sopranos star Michael Imperioli of a bottle of Patrón brand tequila. His answer: "Nuthin.'" In another spot, Imperioli kicks the Patrón bottle off a table, adding, "Oops."

The ads are not new but they are playing in heavier rotation than ever during NFL broadcasts, the perfect tequila-drinking demographic. They're dramatic, and effective. So why isn't Patrón responding?Continue reading...

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