MEXICO CITY, Sept 30 (Reuters) - British beverage company Diageo said on Thursday it will invest $500 million to increase its tequila production capacity in Mexico and help it meet local and international demand for the alcoholic beverage. The president of Diageo (DGE.L) for Latin America and the Caribbean, Alvaro Cardenas, said the company will begin to build the company"s third local manufacturing in the La Barca municipality of the western state of Jalisco. "We"re going to have an investment of more than $500 million dollars to expand our operations here," said Cardenas at an event in Jalisco. "It is the most significant investment we have made in Latin America and the Caribbean in the last 10 years," he added.