Drinks

Analyst: 'Highly Doubtful' That Diageo Is Contemplating Sale Of Guinness

By Steve Wynne-Jones
Analyst: 'Highly Doubtful' That Diageo Is Contemplating Sale Of Guinness

Ahead of the publication of Diageo's interim half year results this Thursday, a leading beverage analyst has told Retail Intelligence that it is unlikely the drinks giant is looking to offload its Guinness brand.

"I would be highly doubtful that the brand [Guinness] would be sold. It is a fundamental part of Diageo’s beer business, which at present is one of the stronger parts of the its business especially in Africa," Shore Capital's Phil Carroll told RI.

Late last year, rumours circulated that Diageo may be looking to sell its its beer assets, valued at £7.4 billion (€9.72 billion), with SAB Miller believed to be a potential suitor for the brands, prior to it being taken over by AB InBev.

Carroll believes that speculation about the sale of Diageo's beer brands centered on SAB Miller "likely looking for a deal to make it harder for AB InBev to acquire them. Clearly, the argument has fallen away with the megabrew deal agreed."

On Guinness' Irish performance, Carroll noted that "the Irish business is performing quite well, with Guinness and the recent Brewers Project innovations such as Hop House lager driving this."

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Shore Capital anticipates a 'particularly interesting' set of results from Diageo this Thursday, 'as it could mark the end of the downgrade cycle for Diageo due to the benefit of an improving operational performance, with potentially accelerating trading momentum and easing FX headwinds following the notable weakness in sterling of late'.

© 2016 - Checkout Magazine by Stephen Wynne-Jones