Diageo considers sale of wine business

By Arabella Mileham

Published: 05 May, 2015

Global drinks Diageo is said to be mulling the sale of its wine division.

Global drinks Diageo is said to be mulling the sale of its wine division following flat sales.

The company currently owns commercial wine brands Blossom Hill, and French wine brand Piat d'Or as well as upmarket wine merchant Justerini & Brookes. Other brands include premium French wine Vignobles Internationaux, Chalone, Sterling Vineyards, which it markets in North America, Beaulieu Vineyard and more recent US acquisition Rosenblum Cellars. It also distributes Möet & Chandon and Dom Perignon under agreement with luxury good giant LMVH.

Diageo told Sky News its wine business were growing.

"We are sure there are many people who would love to own our wine business and we have received expressions of interest over the years," a spokesman said. "As you would expect we have a duty to consider any such interest carefully."

Blossom Hill label

However today Diageo said it did not comment on speculation.

The company's wine business represents around 4% of Diageo's net sales but sales were broadly flat in the year ending 29 January 2015, with organic net sales up 1% on volumes down 4%,. There was growth in the USA market, it noted, driven by growth in the premium wines and innovation, while Western Europe saw more modest growth, driven by its Yellow Tail brand, up 1%. Net sales of Blossom Hill were down 1% however following strong promotional activity the previous year.

Last year sales of Blossom, the UK's second largest wine brand in the UK, fell by around 2.9% to around £241.7m.

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