Diageo faces criticism in Ontario for moving production of the Crown Royal whisky brand

[Crown Royal XR]
memoriesarecaptured/iStock Editorial via Getty Images

Diageo (NYSE:DEO [https://seekingalpha.com/symbol/DEO]) is facing some heat in Ontario for its decision to move manufacturing out of the Canadian province.

Ontario Premier Doug Ford said Diageo will "pay dearly" for closing the Crown Royal bottling plant in Amherstburg, Ontario. "We’ll just wait until the last person walks out that door, and then we’ll act," he told reporters.

Labor union Unifor has also criticized Diageo's (NYSE:DEO [https://seekingalpha.com/symbol/DEO]) move, highlighting that it undermines job security and Crown Royal’s status as a true Canadian whisky.

Diageo (DE [https://seekingalpha.com/symbol/DE]) stated previously that the decision to shift operations to its Valleyfield, Quebec facility was driven by a need to streamline North American supply, lower costs, and position operations closer to U.S. customers of the Crown Royal brand.

Crown Royal is a renowned Canadian whisky brand that dates back to 1938, when it was established in 1939 to commemorate the royal visit of King George VI and Queen Elizabeth to Canada. The whisky brand debuted in the U.S. during the 1960s.

Shares of Diageo (DEO [https://seekingalpha.com/symbol/DEO]) fell 3.5% on Monday. The spirits stock is down 16.4% on a year-to-date basis. The dividend yield for new buyers of the stock is 3.75%.

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