Pedro Domecq began producing Kahlúa in 1936. It was named Kahlúa, meaning "House of the Acolhua people" in the Veracruz Nahuatl language spoken before the Spanish Conquest. (Kahlúa was Hispanicized as Ulúa, forming the name of modern San Juan de Ulúa fortress.)
The company merged in 1994 with Allied Lyons to become Allied Domecq. In turn, that company was partially acquired in 2005 by Pernod Ricard, now the largest spirits distributor in the world since its merger with the Swedish Vin & Sprit in March 2008.
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