Diageo is reportedly exploring the sale of its Chinese assets as part of a portfolio review under new chief executive Dave Lewis. The owner of Guinness and Johnnie Walker has begun working with Goldman Sachs and UBS to assess its operations in China, where sales have declined sharply.
Diageo’s holdings include a majority stake in Sichuan Swellfun, a Shanghai-listed producer and distributor of baijiu. Shares in the Chengdu-based company have fallen 14% over the past year, valuing it at about 19.2bn yuan. The banks are understood to be sounding out interest from Chinese strategic buyers and private equity firms.
Lewis, who took over on 1 January after previously leading Tesco and spending decades at Unilever, has a reputation for aggressive cost-cutting and restructuring. Diageo faces multiple pressures, including falling Chinese demand, high debt, shifting consumer habits among younger drinkers, and the impact of tariffs introduced by Donald Trump.
The review follows Diageo’s recent agreement to sell its stake in East African Breweries to Asahi Group, continuing a broader effort to streamline operations. The company has also faced supply issues and declining consumption in Latin America, as well as a high-profile Guinness shortage in the UK last Christmas.
