Selling井坊? Diageo's Latest Response: Never Discussed

【Introduction】Diageo management states they will not sell assets cheaply and have never discussed selling ShuiJingFang

At the recent FY2026 mid-year earnings presentation (covering the second half of 2025), Diageo management responded to rumors about selling ShuiJingFang (600779).

“We have no intention of selling any assets below their brand value. The market speculation about selling ShuiJingFang is not based on any internal discussions or mentions,” said Dave Lewis, Diageo’s newly appointed CEO, when responding to analyst questions.

Dave Lewis also emphasized that if a third party offers an irresistible price for non-core assets, as a rational operator, “we would obviously consider and engage.”

(Summary of Diageo FY2026 mid-year earnings presentation)

Diageo CFO Nik Jhangiani added that the company has exited some non-core businesses but has never discussed selling brands. The company’s stance is clear: it will not sell assets cheaply. “Regarding the sale of ShuiJingFang, let me be clear: we have never discussed this, it is purely market speculation, so we will not comment further,” he said.

(Summary of Diageo FY2026 mid-year earnings presentation)

By the end of 2025, there were multiple reports in the market about Diageo planning to sell ShuiJingFang, but ShuiJingFang quickly issued a denial. The background of these rumors was that at the end of 2025, Diageo announced an “accelerated plan,” which included disposing of some non-core assets over the coming years to streamline its global business portfolio.

As China’s only foreign-controlled liquor company, ShuiJingFang is actually controlled by Diageo, one of the world’s major spirits giants.

Public information shows that in December 2006, Diageo acquired a 43% stake in ShuiJingFang Group for 570 million yuan, indirectly holding 16.87% of ShuiJingFang. Since then, Diageo has increased its holdings and officially took control in 2013. Currently, Diageo owns about 63% of ShuiJingFang.

In 2025, due to industry restructuring and other factors, ShuiJingFang’s performance was poor. Recent earnings forecasts show the company expects revenue of 3.038 billion yuan, down 42% year-over-year; and net profit attributable to parent of 392 million yuan, down 71%.

ShuiJingFang’s significant decline in performance has also somewhat dragged down Diageo’s overall results. The FY2026 mid-year report released on February 25 shows Diageo’s net sales fell 4% year-over-year to $10.46 billion, and operating profit declined 1.2% to $3.1 billion.

When analyzing the reasons for the decline, Diageo cited mainly the impact of its US spirits and Chinese baijiu businesses.

While reporting slightly lower performance, Diageo also lowered its FY2026 outlook. The company expects organic sales to decline by 2-3%, with organic operating profit remaining flat or increasing slightly in the low single digits. Additionally, the board announced that the interim dividend for this fiscal year will be halved from 40.5 cents to 20 cents per share.

Due to these multiple negative factors, Diageo’s US stock suffered a sharp decline. As of the close on February 25, its share price was $86.15, down 15.65% for the day, with a market value shrinking to approximately $48 billion.