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US: Diageo plans US$115m Kentucky distillery

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Diageo has revealed plans to spend US$115m on a new distillery in the US state of Kentucky to capitalise on American whiskey’s surging popularity.

Diageo is hoping to capitalise on the fast-growing American whiskey category

Diageo is hoping to capitalise on the fast-growing American whiskey category

The company is proposing to build a 1.8m proof gallon distillery and six barrel storage warehouses in Shelby County it announced today (29 May). Diageo said it expects to break ground on the 300-acre site in “the coming months” with an aim to having the distillery operational by “late 2016”.

The facility will produce a number of “current and future” of Diageo’s Bourbon and North American whiskey brands, the company said. The $115m investment will be over a three-year period.

The plans remain subject to approval by local government.

Bourbon is currently the fastest-growing spirits category in the US, having seen 14% value growth in the last year. Its popularity is also booming in export markets.

“This proposed investment in Shelby County, in the heart of Kentucky Bourbon country, will cement our commitment to expanding our share of the American whiskey category,” said Larry Schwartz, Diageo North America’s president. 

Earlier this year, the company became embroiled in a war of words with Jack Daniel's producer Brown-Forman over proposed changes to relax the rules on what defines a Tennessee whiskey.

In February, Diageo launched the Orphan Barrel Whiskey Distilling Co, a new US unit, for releasing high-end “rare” Bourbons.


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