Is It For the Best that Diageo and Cuervo Dissolve their Relationship?

Diageo is getting some late validation for its departure from Cuervo this week. "It probably makes sense that Diageo walked away," says Bernstein analyst Trevor Stirling. "Diageo perceives that all the growth in tequila has been in premium brands. Cuervo isn't premium." Recall Larry Schwartz, Diageo North American president, said in December Diageo would only go after premium tequilas in the future.

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