E-Malt.com News article: Jamaica: Diageo’s Red Stripe and PepsiCo bottler Cabcorp form JV sales and distribution company

Diageo-owned Red Stripe and PepsiCo bottler Cabcorp have signed a deal to form a new joint-venture sales and distribution company in Jamaica.

The new firm – Celebration Brands – will sell and distribute Red Stripe, Diageo and PepsiCo brands in the country, the companies announced last week. Diageo and Cabcorp will have a 50% stake each in the company, with a phased roll out of operations starting in April and expected to last five months.

Cedric Blair, Red Stripe's MD, said Celebrations Brands is expected to create economies of scale, bringing “improved efficiencies” which will “ultimately safeguard the sustained growth of both businesses”.

The companies said that “many roles from both companies will be transitioned to the joint venture”, with a potential 200 extra jobs expected to be created.

Asked about possible redundancies, a Diageo spokesperson said: “Some roles that currently exist in both PepsiCo Jamaica and Red Stripe will be required in the joint venture so that may mean redundancies but we do not have a number as yet.”

A decision on the location of a new office is also expected to be finalised in the “coming weeks”, the spokesperson added.

Gustavo Flamenco has been appointed MD of Celebration Brands, having worked at Cabcorp for eight years, including the last two managing PepsiCo Jamaica. PepsiCo holds an 18% stake in CabCorp, having signed a deal in 2009.

“This strategic alliance is expected to allow for increased capacity and shared expertise as well as access to greater resources, including specialised staff,” said Flamenco.

The new company will have its own board of directors with three representatives from each company.

Both companies will retain the management of their commercial and promotional strategy and production.

Last month, Gruppo Campari completed a US$409 mln tender offer to take control of Jamaica's Lascelles deMercado & Co.

06 February, 2013