{"id":249500,"date":"2026-01-17T12:03:09","date_gmt":"2026-01-17T12:03:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/249500\/"},"modified":"2026-01-17T12:03:09","modified_gmt":"2026-01-17T12:03:09","slug":"house-of-guinnesss-new-chief-wastes-little-time-tackling-stout-at-diageo-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/249500\/","title":{"rendered":"House of Guinness\u2019s new chief wastes little time tackling stout at Diageo \u2013 The Irish Times"},"content":{"rendered":"

British screenwriter and producer Steven Knight, creator of Peaky Blinders and currently writing the script for the next James Bond film, last week dropped the biggest hint yet that his hit Netflix<\/a> drama series House of Guinness<\/a> is coming back for a second season. <\/p>\n

Knight turned uncharacteristically coy when asked in an interview with the Radio Times about another series \u2013 after cutting himself off mid-sentence while talking about the show. <\/p>\n

\u201cI was about to continue then, but I\u2019m not,\u201d Knight said. \u201cI can\u2019t speak about that.\u201d<\/p>\n

Analysts at Barclays were already counting on a global Guinness<\/a> sales bump after House of Guinness premiered in late September continuing into this year as they increased their forecasts for the stout in a recent report. <\/p>\n

It follows a revival for the brand that had already taken hold in recent years. Once seen as tired and beloved mainly by auld lads, Guinness has won over Gen Z drinkers and women \u2013 fuelled in part by viral TikTok trends such as \u201csplitting the G\u201d. <\/p>\n

\u201cWe view [Netflix] exposure as comparable to large-scale marketing reach \u2013 but without the associated spend,\u201d the Barclays analysts said. <\/p>\n

However, there has been little reflected glory in the share performance of Diageo<\/a>, the corporate home of Guinness for almost three decades \u2013 with the stock sliding 10 per cent in the last three months of 2025 last year the year. <\/p>\n

Shares in Diageo, a group behind more than 200 brands that was created in 1997 through the merger of Guinness and Grand Metropolitan, have plunged 60 per cent in the past four years amid a cocktail of issues. These include falling alcohol sales globally, led by the US, inflation, questions over the group going all-in on premium spirits brands (particularly tequila), strategy drift amid management changes, and tariffs.<\/p>\n

The company has also been nursing a long hangover from a surge in investments and overheads \u2013 without discipline and misguided, as it turns out \u2013 during the pandemic as people took to premium spirits in their droves during lockdown. <\/p>\n

Still, there have been signs of life in the stock since the start of the new year \u2013 rising as much as 5.5 per cent \u2013 on mounting hopes that its new chief executive, Dave Lewis, the first outsider to be hired for the role, will turn around its fortunes. <\/p>\n

Diageo agreed just before Christmas to sell its 65 per cent stake in East African Breweries, its last direct beer operation, for $2.3 billion (\u20ac2 billion) to Japan\u2019s Asahi Group. It is highly unlikely that Lewis \u2013 credited with turning around a then-beleaguered Tesco<\/a> after taking over as chief executive in 2014 \u2013 did not have an input into the final decision. <\/p>\n

It follows a series of small disposals \u2013 from the Archer\u2019s Peach Schnapps brand to Pampero Rum in Venezuela \u2013 in recent years. <\/p>\n

This week, Bloomberg reported that the group was considering a sale of its Chinese assets \u2013 including a 63 per cent stake in Sichuan Swellfun, which distributes the distilled spirit Baiju. Shares in the Shanghai-listed unit have fallen 16 per cent in the past year, giving the company a market value of 19.6 billion yuan (\u20ac2.42 billion).<\/p>\n

[\u00a0Guinness parent Diageo seeks to double capacity at Kildare breweryOpens in new window<\/a>\u00a0]<\/p>\n

The group was also reported late last year to be considering a sale of its United Spirits unit in India, which owns the Indian Premier League cricket team Royal Challengers Bengaluru. <\/p>\n

Bank of America Securities estimates the three deals could reduce the group\u2019s net debt to 2.5 times earnings before interest, tax, depreciation and amortisation (ebitda) by the middle of next year, compared with 3.3 times at the end of 2025. The group has an ambition of falling below a ratio of three times by 2028 at the latest \u2013 which is widely seen as a more acceptable level for investors. <\/p>\n

While Diageo has denied any interest in selling its 34 per cent stake in Mo\u00ebt Hennessy, the drinks division of luxury group LVMH<\/a>, its looks increasingly like an odd holding. A hypothetical sale of the stake could raise $4 billion, according to the BofA analysts. <\/p>\n

Known as Drastic Dave for his penchant for cost-cutting during his three decades with Hellmann\u2019s mayonnaise to Dove soap conglomerate Unilever<\/a>, Lewis is also remembered by long-term investors in Tesco for using another trick in the playbook for turning around companies: taking a red pen to dividends. <\/p>\n

He cut the retailer\u2019s dividend by 75 per cent in his first year, before dropping the once-safe annual payout entirely in 2015 and 2016. <\/p>\n

Some analysts are not waiting around. Investment bank Jefferies now reckons he\u2019ll cut the Diageo dividend by half this year. <\/p>\n

\u201cOver three years, this is a cumulative saving of circa $3.5 billion,\u201d the investment bank said in a report this week. \u201cWhen the business is on a firmer footing, we see scope for the dividend to be rebuilt and for a buyback to resume.\u201d <\/p>\n

Returning Diageo\u2019s organic sales \u2013 which are forecast by analysts to be flat, at best, in its current financial year to the end of June \u2013 to solid growth will be Lewis\u2019s big challenge. <\/p>\n

Jefferies reckons it will need a cultural reboot at the company centred on accountability, cost discipline and performance. <\/p>\n

A 10-point action plan from the bank also includes Diageo balancing premiumisation with finding more affordable options for hard-pressed consumers; reinvesting in mainstream brands such as Smirnoff and Captain Morgan; and broadening its low- and non-alcohol offering. <\/p>\n

Lewis doesn\u2019t need to look very far for inspiration. Tapping the team at Guinness \u2013 one of the best recent examples of brand-building in the industry \u2013 would be a good start. <\/p>\n","protected":false},"excerpt":{"rendered":"British screenwriter and producer Steven Knight, creator of Peaky Blinders and currently writing the script for the next…\n","protected":false},"author":2,"featured_media":249501,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[6424,93,604,61,60,124,1868,4013,22358],"class_list":{"0":"post-249500","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entertainment","8":"tag-diageo","9":"tag-entertainment","10":"tag-guinness","11":"tag-ie","12":"tag-ireland","13":"tag-lvmh","14":"tag-netflix","15":"tag-tesco","16":"tag-unilever"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/249500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=249500"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/249500\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/249501"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=249500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=249500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=249500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}