Diageo has selected not to be drawn on claims today that it has commenced a review of its operations in China, including the controlling stake in baijiu producer Sichuan Swellfun.
A report from Bloomberg today (13 January) cited unnamed sources as saying that the Chinese review, which comes less than two weeks after the group welcomed its new CEO, could go as far as a divestment. The claim names two investment banks as having been engaged by Diageo to consider its options in the country.
When contacted by Global Drinks Intel, a spokesperson said the company would not comment on the report.
Diageo first bought into Sichuan Chengdu Quanxing Group, the largest shareholder in Sichuan Swelfun (also known as Shuijingfang), in late 2006, before taking full ownership of the business seven years later. As of 2019, Diageo owns just over 63% of Sichuan Swelfun through the asset.
As well as its international brands, the company’s China presence also includes a distillery producing domestic whisky. The YunTuo distillery, in the south-western province of Yunnan, was officially opened towards the end of 2024.
Dave Lewis, who formerly headed up UK retail multiple Tesco, assumed the CEO position at the Johnnie Walker owner on 2 January. The group is one of many in the spirits industry looking to not only make operational savings – a target of US$625m over the next three years was confirmed in August – but also to offload assets deemed to be surplus to business requirements.
Most recently, its majority holding in East African Breweries was confirmed last month to be heading to Asahi Group for around $2.3bn.
Diageo will report results from its fiscal H1 – to the end of December – on 25 February.
