UK: Diageo puts Port House up for sale
In a statement obtained by just-drinks.com a company spokesman said: "Following last year's review of its operations and entire brand portfolio, Diageo has now decided to invite bids for Croft."
The company said the represented a "strategic decision by the company, taken last year, to concentrate on its major spirits, beer and wine portfolios".
The Croft business includes Delaforce Port and the sell-off could well see the business split, according to industry experts. The Delaforce brand may be too small to attract international interest, especially as it does not own any vineyards of its own.
"The big thing in Port is to buy vineyards at the moment," one source told just-drinks.com. "Delaforce is a small niche brand and might make a nice management buyout."
Croft joins Sandeman, the unwanted Port and Sherry House from last year's Seagram sale, on the market.
Along with a potential management buyout, Sandeman, it is believed, has attracted offers from the likes of Real Tessoro, Campari, Sogrape and Amorim.
"Croft has good estates and a big brand. Whoever is in the running for Sandeman might also be tempted here," the source said.
In July 2000, Diageo announced a major restructuring of its business operations worldwide. This involved a new business strategy concentrating its efforts and resources on eight global priority brands, namely Johnnie Walker, Guinness, Smirnoff, J&B Rare, Baileys, Tanqueray, Malibu.
These businesses are complemented by a range of local priority brands, such as Bells and Gordon's.
"This new strategy calls for a ruthless focus on those businesses that are, or have the potential to become, global brands, delivering high growth and high margins. As a result, some of our smaller brands may be offered for sale outside Diageo," the spokesman said.
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