Diageo buys Filipino luxury rum Don Papa

Diageo has acquired Don Papa Rum, a “super premium” rum from the Philippines. The English spirits giant believes rum has strong growth potential in the premium market.

Fast-growing segment

The owner of spirits like Smirnoff, Talisker, Tanqueray and Yeni Rakı wants to step further into the premium market and its equally premium margins, and buying Don Papa Rum is a part of that. That dark rum was launched in 2012 and is currently available in thirty countries, with France, Germany and Italy being the biggest markets. One of the first in the fast-growing ‘super-premium plus’ segment, the brand recorded 29 % annual sales growth over the past five years.

Diageo has agreed to pay an initial 260 million euros for the rum, but up to 177.5 million could be added by 2028, depending on how successful the acquisition proves. Founder Stephen Carroll will remain involved with the brand. The acquisition will be funded from existing cash reserves and is still expected to be completed in the first half of this year.

Don Papa Rum is named after Papa Isio, one of the leading figures of the Philippine revolution in the late nineteenth century. The sugar plantation foreman is said to have played a crucial role in liberating the island of Negros from Spanish rule. The rum is therefore distilled on that island and aged in American oak barrels, using Negros sugar cane as the basis for the drink.