Diageo has regained control of production and distribution of Smirnoff in Mexico

Diageo has regained control of production and distribution of Smirnoff in Mexico

The president of Diageo's Latin American & Caribbean division has said Peru could be as successful as Colombia for the company. 

In a conference call with analysts last week, Alberto Gavazzi assessed the potential of the region's markets. "I like to think Peru is our next Colombia," he said. "Peru is a market that is emerging strongly and a few years ago we had Colombia where Peru is, so that's clearly a market of focus and attention for us." 

Back in January, Diageo reported an H1 sales increase in Colombia of 24%.

Gavazzi also singled out Mexico, which he described as doing "extremely well" for the company. "It's attractive in both its size and profitability," he said. "Mexican drinkers enjoy consuming more premium marques. Obviously, we're well-positioned across all categories to take advantage of that trend." 

Gavazzi said the company's recently re-launched Buchanan's whisky brand is enjoying strong double-digit growth in both Mexico and Colombia.

Away from whisky, the exec said the company had re-gained control of Smirnoff's production and distribution in Mexico, as well as having completed the acquisition of Don Julio Tequila. 

"No other player in Mexico has the same breadth of category participation," he said. "We are the clear value share leader in spirits with 24% on a past-12- month basis, and almost nine percentage points ahead of the closest competitor."

The LatAm & Caribbean chief also said he saw future potential for Brazil. Drinks producers have been hit hard in the market as macroeconomic conditions continue to hamper consumer confidence. The country has also introduced tax hikes, which became effective in early December. 

"Our executive team in Brazil is energised and focused on navigating the storm," he said. "We are investing behind our brands, our route to consumer, and our talent pipeline, so that we emerge from this downturn with higher share and stronger than our competitors."

On the same call, Gavazzi warned that sales will be softer in the second half of the year, as the company weighs the price of a Don Julio Tequila accounting error.