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Diageo reportedly in talks to offload trio of brands, including Pimm’s

February 25, 2024
Consumer Packaged Goods

Diageo is reportedly seeking a buyer for a trio of its brands as it looks to restore its profits and increase its value for shareholders.

The owner of Guinness and Baileys has hired financial service group Rothschild to explore the sale, which includes Pimm’s, fruit liqueur brand Safari and Pampero rum. Each brand could be offloaded individually or as a three, according to Sky News.

Diageo declined to comment on the reports when approached by FoodBev.

The drinks giant acquired Pimm’s in 1997 as part of the tie-up between Grand Metropolitan and Guinness, which led to the formation of Diageo. Pimm’s, a “secret recipe of gin, herbs and liqueur,” was created in 1840 in London by James Pimm and is a popular drink in the summer, primarily with consumers in the UK.

The process of disposing of non-core brands from its portfolio comes at a testing time for Diageo, as shares have fallen by over 17% in the last twelve months. The company has had a challenging year after the death of its long-time CEO Ivan Menezes in June following a battle with a brief illness.

Additionally, Diageo received a profit warning in November, for which it blamed slow sales, particularly of Scotch whiskey in Latin America and the Caribbean – these markets account for around 25% of its global whisky sales and represent about 25% of the group’s overall revenues.

The following month, it was reported that Diageo was looking for a buyer for several of its beer brands, including Kilkenny and Tusker. Over the last year, the company has also been embroiled in dispute with US rapper Diddy after he accused the drinks giant of racism in relation to their tequila joint venture. The two parties settled the lawsuit in January.

That being said, Diageo has unveiled a cohort of innovations in the last month, including a new line of ready-to-serve cocktails, RTD Cîroc cans, a spicy Smirnoff variation and a Mediterranean-inspired vodka, to name a few.

The drinks giant has also made a number of investments in its business in recent months, including capital injection to accelerate the decarbonisation of the glass industry, MXN 100 million (approx. $5.8 million) in funding to increase water preservation in its tequila production and its new partnership lab, ‘Fusion by Diageo,’ which identifies innovators to co-develop the next generation of digital products that will “elevate consumer experiences”.

By Phoebe Fraser

Source: foodbev.com

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