Diageo is to shut its Crown Royal whisky bottling facility in Ontario next year.
The site in Amherstburg is set to cease operations by February.
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In a statement, Diageo said the move is “part of an ongoing commitment to increase the efficiency and resiliency of its manufacturing footprint”.
It added Crown Royal would still be “mashed, distilled and aged in Canada”.
The group will retains its Canadian headquarters and warehouse operations in the Greater Toronto area, as well as bottling and distillation locations in Valleyfield Quebec, as well as in Gimbli, Manitoba.
Crown Royal products destined for Canada and markets outside the US will still be bottled at the Valleyfield facility.
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By GlobalData“Through this process, the company will unlock additional productivity and increase resiliency and capacity to scale, effectively meeting demand across its markets and shifting some bottling volume to be closer to its many US Crown Royal consumers,” Diageo said.
The number of employees affected by this closure has not been disclosed.
Marsha McIntosh, Diageo’s president of North America supply, said the move was a “difficult decision, but one that is crucial to improving the efficiency and resiliency of our supply chain network”.
In a separate statement, Unifor, which represents workers at the Amherstburg facility, said its members are “prepared to fight to save the 170 union jobs”.
During the fiscal year ended 30 June, Crown Royal’s net sales rose 3% on an organic basis. Volumes increased 4%.
In the US, Crown Royal’s net sales grew 3.8%, with Diageo pointing to “strong demand” for its Crown Royal Blackberry product.
Group-wide, Diageo’s reported net sales fell 0.1% to $20.25bn but rose 1.7% organically.
The company’s reported operating profit declined 27.8%, reaching $4.34bn. amid impairment charges, restructuring costs and unfavourable exchange rates.
Operating profit before exceptional items dipped 0.7% to $5.71bn.
Reported net profit took a significant hit, dropping 39.1% to $2.54bn.
Alongside its full-year results announcement in August, Diageo raised its cost savings target by $125m, aiming for approximately $625m in savings over the next three years.
Speaking to reporters at the time, interim CEO Nik Jhangiani said the “main areas of focus” were on “trade investment and A&P spend to drive for more efficient and effective spend”.
He added: “I would actually more focus on the trade investment, the non-working element of our A&P spend, and the commercial A&P, where I truly see, as we talk through commercial execution excellence, we need to link up our investments in a more structured way, through the line.”
The interim chief executive said there would also be “continued focus around supply chain agility”.
