Guinness's Future at Diageo: Sale or Spin-off?

World's leading spirits maker, Diageo, is considering the sale or spin-off of its successful beer brand, Guinness. This news, supported by reports of evaluating their stake in LVMH's Moet Hennessy, comes despite strong sales performance by Guinness and skepticism from analysts about a potential sale.

Diageo, the foremost global spirits manufacturer, is reportedly assessing the possibility of selling or spinning off its successful beer brand, Guinness. Additionally, the company is evaluating its stake in LVMH's Moet Hennessy, according to sources familiar with the proceedings, as reported by Bloomberg News.

The potential sale announcement of Guinness propelled Diageo's shares upwards by nearly 4%, marking it as the highest percentage gainer on the blue-chip index. However, some analysts and insiders question the strategy, noting that selling Guinness—a star performer within Diageo's largely spirits-oriented portfolio—might not align with current company interests.

Guinness has outpaced key liquor brands like Johnnie Walker, with double-digit sales growth yearly since 2021, even amid slowing liquor demand. Analysts and sources suggest that selling such a high-performing asset could be counterintuitive, considering Diageo CEO Debra Crew's positive remarks regarding the brand. Simultaneously, reports hint at potential strategic maneuvers involving Diageo's Moet Hennessy stake.

(With inputs from agencies.)