Diageo is reportedly considering selling its Chinese assets as part of a strategic overhaul under its new chief executive, Dave Lewis. The owner of major brands including Guinness and Johnnie Walker is said to be working with Goldman Sachs and UBS to review its China operations, where sales have been weakening. According to Bloomberg News, the review could lead to the disposal of Diageo’s 63% stake in Shanghai-listed Sichuan Swellfun, a producer and distributor of baijiu. Shares in Sichuan Swellfun have fallen sharply over the past year, reducing its market value to about 19.2bn yuan.
Lewis, who took over at the start of January, has a reputation for aggressive cost-cutting from his time at Unilever and later at Tesco. Diageo is facing multiple pressures, including high debt, falling alcohol consumption among younger consumers and the impact of US tariffs under Donald Trump. The potential China sale follows Diageo’s recent agreement to sell its stake in East African Breweries to Asahi Group, signalling a broader effort to slim down its global portfolio after a challenging period marked by profit warnings and supply disruptions.
