Diageo’s accuses Bacardi of trying to scuttle relocation move

The British drinks company Diageo has issued a 13-page statement against arch-rival Bacardi, accusin

Diageo is moving to the US Virgin Islands to build its own distillery and move production away from Destilería Serralles in Puerto Rico. The company has been lured by a $2.7bn subsidy over 30 years from the local government.

Bacardi has argued that Diageo is taking undue advantage of the tax conditions. Diageo on the other hand has accused Bacardi of using politicians and front groups to subvert the lucrative relocation.

Diageo's decision follows a 30-year public-private initiative between the UK drinks major and the US Virgin Islands. The US Congress provides "rum cover-over" revenues to the US Virgin Islands but until this initiative the territory had failed to attract substantial rum production.

The benefits outlined by the US Virgin Islands government have been reported to include a 50 per cent share of the tax rebate, a 90 per cent reduction on income tax and no property tax.

The world's largest premium drinks group by volume, Diageo has a market share of 28 per cent, while the Bacardi group commands 10 per cent.