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BREAKING NEWS: Diageo (DEO) Workers On Strike At Crown Royal Facility

Sin Stock: Diageo Crown Royal

Crown Royal is a popular blended Canadian whiskey. It was started in 1939 by Seagram to commemorate a visit to Canada by British royalty. In 1964 it broke out of Canadian borders to be sold elsewhere. Today it’s a popular whiskey brand in Canada and the US, being named “World Whisky of 2016”. (source: Wikipedia)

Crown Royal is owned by alcohol sin stock company Diageo (DEO). The company, overall, has a marketshare of 25% in the US, thanks to many well-known brands like Crown Royal, Johnnie Walker, Bailey’s, and Guinness. (Source: Wikipedia with notes from Diageo‘s annual investor presentations and SinStockReport).

Crown Royal is produced in Gimli Manitoba, on Lake Winnipeg in Manitoba Canada…

Diageo-CrownRoyal

The union of workers who make Crown Royal (United Food and Commercial Workers Local 832) voted to strike last night and they went to the picket lines today.

During negotiations, they rejected Diageo’s latest offer and subsequently voted 98% to reject Diageo’s offer and 100% to strike.

Wage increases, vacation time, and health benefits are the main sticking points in negotiations.

(Sources: CBC, The Sun, CTV, Global).

WHAT DOES THIS MEAN FOR DIAGEO (DEO)?

Crown Royal ships about 600,000 12-bottle cases a year from its Gimli facility (the only Crown Royal facility). (Source: The Globe And Mail).

It’s unknown how big of an impact that Crown Royal sales has on parent company Diageo but it could be significant. However, the company owns multiple popular brands, including multiple whiskey and scotch brands so the impact will be ameliorated.

Still, if the strike is not resolved soon, and if Diageo’s Crown Royal supply dries up, the company may be forced to rethink its offer, especially in light of the “World Whisky 2016” award that helped to elevate the brand earlier this year.




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