According to Luxist.com, Diageo is believed to be considering a bid to buy the historic Jose Cuervo Tequila brand, the biggest Tequila brand in the world which is still family owned by the Beckmann family dating back to 1758. Diageo already controls most of Cuervo’s distribution, but the beverage company would pay perhaps $2 billion to own it outright.
The reason for Diageo’s interest is open for speculation, but tequila consumption has been growing in Mexico and the United States. The attraction for Diageo comes from the great deal of growth potential for Tequila in developing markets like China and India, and also ensuring that if the Beckmann family wants to cash out, Jose Cuervo will go to their portfolio, and not that of Pernod Ricard of Brown-Forman.
Diageo already controls most of their worldwide distribution, and wants to have the top selling brand for the lower end of the price ladder, as well as see potential in growing the premium tequila business in the U.S., Europe and Asia. Cuervo and Diageo also jointly own Don Julio premium Tequila.
