August 9, 2020

Diageo moving production of Red Stripe US supply

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NORWALK, Conn. (AP) – Alcoholic drink maker Diageo PLC is moving production of the U.S. supply of its Red Stripe beer from Jamaica to the U.S. starting next year.

Seventy jobs are to be lost at Red Stripe by April next year, as the company moves production for the North American market to the United States.

The company, which makes premium spirits, wine and beer, said Wednesday that contract brewer City Brewing Co. will be responsible for producing the U.S. supply of Red Stripe. City Brewing is based in Latrobe, Pennsylvania.

Jamaica’s Desnoes & Geddes Ltd. will still make Red Stripe for Jamaica, Brazil, Canada and Europe. It will also receive royalties on Red Stripe sales in the U.S.

Richard Byles, the Chairman of Red Stripe, says while the decision was a painful one, it was strictly a business decision aimed at stopping losses in the operation.

He says the move will improve the margins on Red Stripe sold overseas by 50% with the money to be diverted in boosting its sales in the Jamaican market.

Diageo said the production plan is typical of most global brewers and will allow for a greater investment in the brand in the U.S.

Shares of Diageo, whose other brands include Johnnie Walker whiskey, Smirnoff vodka and Jose Cuervo tequila, added 18 cents to $75.76 in morning trading.

 

 

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