By Christopher McCollum

In my previous ‘Diageo Dollars’ article, I wrote about Diageo departing Puerto Rico for St. Croix in the U.S. Virgin Islands, stirred on by their quest for greater profit margins. While that can be decried as being one of the evils of Capitalism, and the epitome of corporate greed, it must be remembered that one action can not condemn an entire group. Even though in Diageo’s case, many people think it’s actually two actions, as they closed down a 200 year old Johnnie Walker distillery in Kilmarnock, Scotland, as well as the grain depot Port Dundas, in Glasgow. Company restructuring aside, it could be easy for many people to view Diageo in a very negative light, thinking that they do not see the common man as anything more than a tool that can be discarded at the whims of whatever boss has monetary symbols in his or her eyes. However, it would be wise to take each action as it is, and remember that it does not reflect completely on the moral compass of those in charge of the company. Many actions over time can have the company begin to earn their reputation, but until that day comes, let’s also consider that terrific things can be done by those with the power and ability to do it.

For example, a couple of days ago, news broke that Diageo would be chartering a plane and sending relief supplies to Haiti, where they have part ownership in a brewery in Port-au-Prince. These supplies include medical kits, and 45,000 pounds of food that will reach tens of thousands of starving people who are still at this moment residing in the earthquake ravaged capital city. Many are still dying, adding to the potential total death toll of over 200,000 people. Food and water is still barely getting to the necessary places, and hopefully Diageo’s contribution will make it to the victims sooner rather than later.

The soft side of Diageo has been shown, and let’s hope that many others follow suit. The world is indeed a cruel place, but with the generosity of those who can manage it, it doesn’t have to be quite as cruel for some people.

By Christopher McCollum

It was reported several months ago that the producer of Captain Morgan Rum, Diageo PLC (NYSE: DEO), was going to be getting a new factory in the U.S. Virgin Islands, along with $2.7B USD in tax credits and benefits over the next 30 years, which sparked a bit of controversy as they are a British owned company. With this struck deal, Diageo will be moving the Captain Morgan operations from Puerto Rico, where they’ve been operating for generations, to St. Croix in the Virgin Islands, while potentially putting the rum culture in jeopardy.

Puerto Rican representatives claim that this business move will cost Puerto Rico about $120M annually in lost tax revenue, which at this point in time is an even harder pill to swallow than in the past. In March of 2009, Puerto Rico’s governor, Luis Fortuno, declared that the government there is bankrupt, with a deficit of more than $3B USD, making it the highest deficit-per-capita in the United States. Over the ensuing months, there have been plans implemented to lay off potentially 30,000 government workers, and to slash salaries across the board in an effort to save money. Union protests have been going on all over San Juan’s financial districts, and the unemployment rate on the Island of Enchantment will soar to potentially 17%.

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