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After Don Julio Acquisition, Diageo Will Spend $400 Million On Expanding Mexico Operations

March 4, 2015

Following last Friday’s announcement that Diageo had secured 100% ownership of Tequila Don Julio, the drinks giant now says it plans to spend $400 million over five years to boost its Mexican production facilities and agave farming capacity, among other initiatives.

Diageo stated today that it would expand its distilling, bottling and water treatment facilities in Mexico, and develop a new “heritage center” at Atotonilco, Jalisco. The company expects its Mexican investment to create about 200 jobs at its own Diageo Mexico unit, and added that it will be increasing its advertising and promotional spend on Don Julio to build the brand globally.

In addition to global expansion plans, Diageo is bullish on the domestic Mexican market, where it noted that over half the population are already defined as middle class while the legal drinking age population is expected to increase to 64% in the next four years. “This represents a significant opportunity within international spirits, which currently have relatively low penetration versus beer and local spirits,” Diageo said.

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