Diageo rules out sale of Guinness brand and stake in Moët Hennessy

ADVERTISEMENT

UK drinks company Diageo has denied that it is considering a sale of its Guinness brand, along with a 34% stake in the champagne and cognac business, Moët Hennessy.

In a statement released on Sunday, Diageo insisted that it had “no intention to sell either”, responding to media reports released days earlier.

Bloomberg News reported on Friday that Diageo was reviewing its portfolio in an effort to revive growth.

The report said that Guinness, which could be privately sold or publicly listed, could be valued at more than $10 billion (€9.5bn).

The Irish stout brand is an outlier in Diageo’s portfolio, which focuses predominantly on spirits.

Guinness’ popularity has nonetheless rocketed recently as social media has boosted its appeal among young consumers.

The “split the G” trend has notably fuelled demand. The online challenge involves drinkers swallowing enough Guinness on their first swig so the remaining liquid lands halfway through the G on a branded glass.

Guinness drinkers in the UK subsequently faced shortages around the festive period, leading some pubs to ration the stout.

A sale of the brand, which now appears unlikely, could provide a cash injection for Diageo amid a rocky period.

Cooling demand in China and the US has hit margins, and a build-up of unsold inventory in Mexico and Brazil forced the firm to issue a profit warning in 2023.

Spirit sales have dipped since the pandemic – partially as consumers hit by inflation look for cheaper alcoholic alternatives.

Guinness sales have meanwhile grown by double digits every year since 2021.

Diageo said in Sunday’s statement that it would next update the market with half-year results on 4 February. 

Analysts have suggested that growth targets could be downgraded.