One cannot but feel some sympathy for Debra Crew, one of the small band of FTSE 100 female chief executives.
Parachuted into office in 2023 after the premature death of predecessor Ivan Menezes, it has been one thing after another for Crew and Diageo.
Britain’s world-leading distiller, home to Johnnie Walker, has struggled. Legacy problems in Latin America, where there was overstocking, were an early setback.
Then, over the holiday period, Crew felt the sharp end of the tongue of Britain’s biggest pub keeper, Tim Martin of Wetherspoons, because demand for Guinness was so buoyant that Diageo couldn’t brew enough to keep his hostelries supplied.
In an age of craft brewing, Guinness, still made on the banks of the Liffey in Ireland, has proved the ultimate specialist ale.
This inevitably led to speculation that Diageo was aiming to ditch a great money-spinner. It is one of those perennial analyst suggestions which over the decades has proved consistently wrong.
Crew can take some responsibility for home-grown, if inherited, problems. But the Texan-born former military intelligence officer cannot be criticised for the mercantilism of her Commander-in-Chief Donald Trump.
Diageo faces challenges on multiple fronts. Its premium Tequila brands Don Julio and Casamigos are distilled from the blue agave plant, native to Mexico.
North of the border in Canada, Diageo distils Crown Royal Canadian whisky. The cost to Diageo in terms of lost sales, because of tariffs – should they be re-imposed in 30 days – is put at some £160million.
That may only be the start. Last time Britain fell under the gaze of US protectionism, it was inexplicably my favourite tipple, single malt Scotch, which took the hit.
As the UK’s biggest cash export, shipped in bottles, scotch is particularly vulnerable to trade wars.
In the current muddled circumstances, Diageo has suspended its upbeat target of 5 per cent to 7 per cent sales growth over the medium term.
And operating profits in the first half of the current financial year tumbled by 4.9 per cent to £3.1billion.
The company is taking advantage of the present trade hiatus to try and bring more discipline to costs. The shares predictably fell and are at their lowest level since 2020.
Younger generations may be drinking less. But demand for Guinness and aspirational spirit brands isn’t going anywhere.
Lost trust
The Investment Association (IA) has been engaged in belated rearguard action for the last several weeks to protect their members from the unwanted attention of corporate raider Boaz Weinstein of Saba Capital.
So it is odd to find that among those backing the IA’s 2025 conference, described as ‘our largest and most diverse’, is none other than Saba Capital, described as a gold sponsor.
This is akin to the Campaign Against Arms Trade sponsoring the UK’s leading-edge Defence & Security Equipment arms fair.
Saba so far has had a torrid time in its effort to destabilise Britain’s £266billion investment trust sector. Its latest effort to displace the boards of Henderson Opportunities and CQS Natural Resources, Saba nominees were roundly rejected by shareholders in votes counted yesterday.
Weinstein’s backdoor attempt to take control of seven trusts has now been rejected at five. He looks to be on course for a seven-nil trouncing.
One should not imagine that this is the endgame. Weinstein, at last count, had taken positions in some 24 trusts.
His aim is to profit from the gap between quoted share prices and the underlying assets –the so-called discount.
Having failed in the effort to mount an American-style proxy fight, there is an expectation that Saba could come back with a tender offer for shares in some of its targets.
The current battle may be over, but this could be a long war of attrition. Not much fun when your ineffectual trade organisation allows the fox into the hen house.
Power play
Donald Trump’s ‘Drill, baby drill’ mantra has re-energised Britain’s oil majors despite Labour’s green fixation.
Shell has restarted production at the Penguins field in the North Sea.
BP has reverted to the Middle East with an intention to spend £20billion to redevelop four oil and gas fields in the Kirkuk region of Iraq. Fossil fuels are not down and out just yet.
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