Diageo has agreed to a nearly CA$23 million (US$16.8m) settlement with the Ontario government to ensure its Crown Royal Canadian whisky brand remains available in Liquor Control Board of Ontario (LCBO) stores.
The agreement resolves a dispute stemming from Diageo’s plan to close its Amherstburg, Ontario, bottling facility, which had prompted threats from Ontario Premier Doug Ford to ban Crown Royal from LCBO stores in the province.
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The dispute began after Diageo announced in 2022 its intention to shut down the Crown Royal bottling plant by 2025.
In response, Ford threatened to permanently pull Crown Royal products from the provincially owned LCBO stores.
The premier expressed concern that Diageo would move the brand’s production to its new facility in Alabama.
However, political leaders in Québec and Manitoba had urged Ford to reconsider a boycott, fearing it would lead to wider job losses.
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The Ontario government confirmed the settlement funds will be used to support the province’s economy and create new jobs.
A portion of the settlement, CA$500,000 (US$367,000), will be put into Invest WindsorEssex for economic development with a focus on Amherstburg.
Another CA$500,000 will be given to other community projects to support the town’s residents.
The largest allocation, CA$11m (US$8m), is designated for the purchase of grain neutral spirits from manufacturer Greenfield Global in Johnstown, supporting production in eastern Ontario.
Remaining funds will support new ready-to-drink co-packing in Toronto for brands including Crown Royal, Smirnoff, and Captain Morgan.
The money will also fund agricultural organizations, new packaging co-manufacturing in Scarborough, and Ontario-based marketing initiatives.
Despite the agreement, the Amherstburg facility closure will proceed this month and will impact approximately 200 jobs.
There were reports last year that several alcohol companies had shown interest in buying the plant, which Diageo rejected, claiming it had not received any appropriate offers.
According to The Spirits Business, Ford said: “By standing firm in our plan to protect Ontario workers, we’ve secured nearly CA$23m in investments that Ontario would not otherwise have seen. These investments will help keep Ontario workers on the job, strengthen provincial supply chains and support the local community in Amherstburg and the surrounding area.”
Ford’s office stated the agreement “strengthens Ontario’s end-to-end beverage alcohol supply chain.”
As reported by The Spirits Business, Peter Bethlenfalvy, finance minister for Ontario, added: “Ontario remains committed to protecting good jobs and ensuring that industries across the province continue to grow and thrive. By working collaboratively with industry, we are building a stronger, more resilient supply chain while ensuring that companies benefiting from Ontario’s marketplace invest back into our people and our communities.”
