Jamaica: Heineken invests in new filling capacities for Red Stripe

Following last year’s decision to bring back production from the United States to Jamaica, Desnoes and Geddes Limited (D&G), the maker of Red Stripe beer, has announced to spend next year JMD 1.7 billion (USD  13.2 million) to build a new packaging line and implement new inventory and data-processing software in its brewery in Kingston/Jamaica.

Heineken, which bought D&G in October 2015 from spirits company Diageo and meanwhile holds 95.78 per cent of the shares, decided last year to terminate an external brewing agreement with City Brewing in Latrobe, Pennsylvania and bring back production to Jamaica.

In 2012, former owner Diageo had outsourced production of beer for the United States and United Kingdom markets because the company had been losing allegedly around JMD 500 million (USD 3.9 million) annually on local production for exports.

In 2015, the company was sued in the US for misleading consumers over the origin of its beers, which used deceptive phrasing like Jamaican Style Lager and Taste of Jamaica. However, the case was dismissed in April 2016 after the court expressed the view that the beer need not be manufactured in Jamaica to be called a Jamaican beer, as the nationality was a modifier and not a statement of origin.

In September 2016 D&G resumed production in Jamaica of export beer destined for the US, mainly to reestablish the authenticity of the Red Stripe brand. "We mean to supply the world with this amazing, high-quality, great, iconic beer. It is iconic; it is what is good about Jamaica. It helps us remind of what's good about life. It really is synonymous about Jamaica - proud, full of confidence, full of potential; and a constant reminder to enjoy life," says Ricardo Nuncio, Managing Director at Heineken Jamaica.

The move exploits filling capacities in the Kingston brewery and makes new investments necessary: "Our current line is not capable of supplying the demand for the next three years. Right now, our line is at maximum capacity, we have no room to grow. So we are investing in this line to manage our demand for the next 10 years," says Nuncio.

D&G increased turnover for the year ending December 2016 by 20% to JMD 19.2 billion (USD  148.5 million) and made a net profit after tax of JMD 3.35 billion (USD  25.9 million), up 21%.

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