Diageo plans new rum production facility

NEW YORK (Reuters) - Diageo (DGE.L), the world's biggest alcoholic drinks group, said on Monday that it will build a distillery in the U.S. Virgin Islands that will supply the rum used to make its Captain Morgan branded products for the United States.

The facility on the island of St Croix will be built in partnership with the U.S. Virgin Islands and will begin production in 2011. The company currently sources its rum for Captain Morgan products from a vendor in Puerto Rico, a spokeswoman for Diageo said.

The new facility will have capacity to distil up to 20 million proof gallons per year. By 2012 the distillery will supply all rum used to make Captain Morgan branded products for the U.S.

Other Diageo brands include Smirnoff vodka, Johnnie Walker scotch, Guinness beer and Tanqueray gin.

(Reporting by Euan Rocha and Martinne Geller and Carol Bishopric)