Diageo Just Says No

Not enticed by recent consolidation in global beer business

Diageo, the global purveyor of spirits and wine brands has no need to increase its presence in the beer category and would only consider acquiring a brewery business if it operated at the premium end of the market, Chief Executive Paul Walsh said last week.

Walsh told reporters at the company’s annual results presentation in London that Diageo isn’t under pressure to increase its scale in the beer category despite recent consolidation in the industry.

Diageo makes Guinness stout and lagers such as Red Stripe but is a small player in the sector compared with giants like SABMiller and InBev. It’s spirits and wine portfolio is impressine, with such brands as Smirnoff, Johnnie Walker, Captain Morgan, Baileys, J&B, José Cuervo, Tanqueray, Guinness, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines.

Diageo was formed in 1997, following the merger of GrandMet and Guinness, and is headquartered in London.

Walsh said there is no point in buying a large brewery just to get bigger, if that brewery were focused on mainstream beer. “We want scale but we want it at the right price points,” he said.

“If we see an opportunity to enter premium beer space we will,” he said.