Diageo appears to be wanting to hold on to its Guinness brand

Diageo appears to be wanting to hold on to its Guinness brand

Diageo has appeared to rule out selling its Guinness brand, but other “non-core” beer and wine assets could be put on the market, according to an analyst.

During an investors day presentation in London yesterday (19 November), the company “sent a message” that the Irish stout brand, along with the group's mainstream beer businesses in Africa, are “not for sale”, Nomura reported. Last year, analysts at Investec Securities suggested Diageo would be better off selling Guinness and concentrating on spirits.

However, the group has since invested in the brand in Africa, and the UK, where it is pumping in GBP34m over the next 12 months. In its last set of full-year results, the group's overall beer volumes fell by 2%, but the category still represents 21% of net sales.

On other other possible market activity, Nomura added: “(Diageo's CEO Ivan) Menezes did not rule out pruning some non-core brands.

"We think that this could include some beer brands  - (possibly) Red Stripe in the Caribbean and some wine brands, excluding the US where wine is important for wholesalers’ portfolios, (possibly) Piat d’Or in UK?”  

Among Menezes six "must-dos", as part of the group's strategy revealed yesterday, was "strenghtening and accelerating" premium core brands, which now represent around 60% of sales.