Diageo has ruled out a sale of its famous Guinness brand, quashing speculation that the drinks giant was looking to cash-in on runaway demand demand for the fashionable Irish stout.
The FTSE 100 company issued a statement on Sunday, denying that Guinness was up for sale or that a disposal of its 34% stake in the champagne and cognac business Moët Hennessy was on the cards.
“We note the recent media speculation around the Guinness brand and our stake in Moët Hennessy and we can confirm that we have no intention to sell either,” Diageo said. It is understood that listing Guinness on the stock market is not under consideration either.
Analysts had suggested that Guinness could fetch up to $10bn (£8bn) if it was sold or spun off, according to Bloomberg, which first reported the speculation. The rumours sent Diageo shares up more than 4% on Friday.
Guinness is the star performer in Diageo’s portfolio, which consists mostly of spirits rather than beer. The stout has benefited from a social media-fuelled surge in demand as the company enlisted high-profile influencers and celebrities to help increase its appeal among women and younger drinkers, including gen Z.
Such was the clamour to be seen drinking pints of Guinness in the UK that in December Diageo was forced to raid its reserves in Ireland to increase shipments and stop pubs running dry.
A sale of Guinness was billed as one of the ways to turnaround the company’s fortunes. It follows a difficult period for Diageo, whose share price has flounder since Debra Crew took over as its chief executive in the summer of 2023. Crew was forced to issue a profit warning just months after taking the reins.
Diageo owns more than 200 brands including Johnnie Walker, Smirnoff and Captain Morgan. However, spirits sales have struggled since a pandemic boom in demand for more upmarket drinks went into reverse. Meanwhile, Guinness sales have grown by double digits every year since 2021, with demand for its zero-alcohol version also surging.
Diageo said it would next update the market when it issued its half-year results on 4 February. It will also hold an investor and analyst day for the Guinness brand in May.
