Diageo is reportedly considering selling its Chinese assets as part of a strategic review under its new chief executive, Dave Lewis. The owner of brands including Guinness and Johnnie Walker is working with Goldman Sachs and UBS to assess its operations in China, where sales have been declining, according to reports.
Diageo’s holdings include a controlling stake in Sichuan Swellfun, a Shanghai-listed producer and distributor of baijiu, China’s traditional distilled spirit. The banks are said to be gauging interest from Chinese strategic buyers and private equity firms. Shares in Sichuan Swellfun have fallen 14% over the past year, valuing the company at about 19.2bn yuan (£2bn).
Lewis, who took over in January after leading turnarounds at Unilever and Tesco, has a reputation for cost-cutting and portfolio simplification. Diageo is facing multiple pressures, including high debt, the impact of US tariffs under Donald Trump, and changing consumer habits as younger generations drink less alcohol. The company warned in November of a double-digit sales decline in China.
The possible China divestment follows Diageo’s recent agreement to sell its stake in East African Breweries to Asahi Group, marking its exit from direct beer operations in Africa. Lewis succeeded Debra Crew, whose tenure followed the death of former chief executive Ivan Menezes and was challenged by profit warnings and supply issues, including a high-profile Guinness shortage in the UK last Christmas.
