Diageo raises toast to Brazil

Drinks group Diageo is toasting its success in the Brazilian market through the acquisition of spirit brand Ypióca for $469m.

The UK-based company who make Guinness, Johnnie Walker Scotch whisky and Smirnoff vodka has agreed to buy the brand of cachaça from the family-owned Ypióca Agro-industrial group, as it continues to expand in emerging markets.

“Brazil is an attractive, fast growing market for Diageo with favourable demographics and increasing disposable incomes,” says Diageo chief executive Paul Walsh. “The acquisition of Ypióca gives us the leading premium brand in the largest local spirits category.”

The distiller is expanding sales in emerging markets to at least 40 percent of its total revenue, and is aiming to raise this to 50 percent by 2015. Last year it bought Turkey’s Mey Icki raki brand for $2.1bn, and got regulatory approval in March to buy  Chinese-white spirits maker, ShuiJingFang.

Ypióca is the second largest cachaça brand by value in Brazil, and the rum, made from fermented sugar cane, is the national alcoholic beverage of the country.

Morgan Stanley advised Diageo on the purchase which is due to be completed at the end of June.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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