JAMAICA: Diageo's Red Stripe, Cabcorp agree JV deal

By | 29 January 2013

The new company will distribute the Diageo-owned brand in Jamaica

The new company will distribute the Diageo-owned brand in Jamaica

Diageo-owned Red Stripe and PepsiCo bottler Cabcorp have signed a deal to form a new joint-venture sales and distribution company in Jamaica. 

The new firm – Celebration Brands – will sell and distribute Red Stripe, Diageo and PepsiCo brands in the country, the companies announced today (29 January). Diageo and Cabcorp will have a 50% stake each in the company, with a phased roll out of operations starting in April and expected to last five months. 

Cedric Blair, Red Stripe's MD, said Celebrations Brands is expected to create economies of scale, bringing  “improved efficiencies” which will “ultimately safeguard the sustained growth of both businesses”. 

The companies said that “many roles from both companies will be transitioned to the joint venture”, with a potential 200 extra jobs expected to be created.  

Asked about possible redundancies, a Diageo spokesperson told just-drinks:  “Some roles that currently exist in both PepsiCo Jamaica and Red Stripe will be required in the joint venture so that may mean redundancies but we do not have a number as yet.” 

A decision on the location of a new office is also expected to be finalised in the “coming weeks”, the spokesperson added. 

Gustavo Flamenco has been appointed MD of Celebration Brands, having worked at Cabcorp for eight years, including the last two managing PepsiCo Jamaica. PepsiCo holds an 18% stake in CabCorp, having signed a deal in 2009. 

“This strategic alliance is expected to allow for increased capacity and shared expertise as well as access to greater resources, including specialised staff,” said Flamenco.  

The new company will have its own board of directors with three representatives from each company. 

Both companies will retain the management of their commercial and promotional strategy and production. 

Last month, Gruppo Campari completed a US$409m tender offer to take control of Jamaica's Lascelles deMercado & Co.

Expert analysis

Caribbean Beer Market Insights 2012

This report provides readers with an excellent way of gaining a thorough understanding of the dynamics and structure of the Caribbean Beer industry. Data includes volumes from 2007 to 2011 plus forecasts for 2012, enabling historical and current trend analysis.

Sectors: Beer & cider, Soft drinks

Companies: Diageo, PepsiCo, Campari

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