The looming closure of an Ontario plant that bottles Crown Royal sparked political blowback this week, but a supply chain expert says the company behind the move faced pressing decisions on how to cut costs.
Spirits maker Diageo found itself in Doug Ford's crosshairs Tuesday when the Ontario premier dumped out a Crown Royal bottle during a press conference.
Ford was protesting Diageo's announcement last week that it will cease operations at its bottling facility in Amherstburg in February as it shifts some bottling operations to the U.S.
Ivey Business School professor Fraser Johnson says the move will save the company money as it centralizes bottling work and reduces transportation.
He says the company has been facing financial challenges from reduced sales due to the declining popularity of spirits, while its facility in the southern Ontario town has also been aging.
Diageo says the facility closure is meant to improve its North American supply chain, but it will maintain a significant footprint in Canada through its headquarters and warehouse operations in the Greater Toronto Area, and bottling and distillation facilities in Manitoba and Quebec.