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Diageo in spat with Bacardi over rum

City A.M. Reporter
DRINKS giant Diageo has accused rival Bacardi of trying to drive its Captain Morgan rum production out of the United States in order to protect its own rum subsidies from the Puerto Rican government.

The company claimed Bacardi is leading a “hidden campaign” to hound Diageo’s Captain Morgan rum production out of the US Virgin Islands (USVI), in a move that would “destroy” the territory’s economy.

Diageo has a deal with the USVI involving a new rum distillation facility where it will produce Captain Morgan rum for at least 30 years, starting from 2012 when its contract with Puerto Rican rum producer Destileria Serralles runs out.

Last week, the National Puerto Rican Coalition (NPRC) said that Diageo would get $2.7bn (£1.75bn) in US taxpayer-funded subsidies for the move.

But Diageo vice president Guy Smith is understood to have claimed that Bacardi was “using a campaign of misinformation to get Congress to retroactively overturn its US Virgin Islands initiative”.

Smith said Bacardi officials and lobbyists have visited US congressional leaders and Puerto Rico officials to discuss opposing its move.

He also said that the NPRC is urging the Hispanic community in Puerto Rico and throughout the United States to boycott Diageo goods.

But Bacardi dismissed the claims in a statement.

“This isn’t about where Diageo receives a free distillery, but about the proper use of federal tax dollars,” said spokeswoman Patricia Neal.