Subscriber login Close [x]
remember me
You are not logged in.

Diageo sells Argentinean wine business to Grupo Peñaflor

Published:  06 November, 2015

Diageo has sold its Argentinean wine business to Grupo Peñaflor, the global drinks group announced yesterday.

The transaction, which is for an undisclosed sum, includes the Navarro Correas and San Telmo wine brands, together with related vineyards and production facilities.

The wine business turned over £18.5 million in the year to June 30, 2015.

The sale is part of a wider deal between the two companies that will also see Peñaflor take over the distribution of Diageo's international spirits brands in Argentina.

In addition, Peñaflor will partner with Diageo to produce its domestic spirits brands across Argentina.

Grupo Peñaflor is the largest producer and distributor of wine in Argentina.

In a statement, Diageo said it hoped the appointment of a dedicated distributor in Argentina would strengthen its route to market and accelerate the performance of its brands there.

At present, Diageo sells directly to the major grocers in Argentina. Sales to other businesses are managed through a combination of wholesalers and distributors.

The transaction is expected to be completed early in 2016.

it will result in an exceptional loss before taxation for Diageo of some £60 million upon completion.

Diageo's share price nudged higher on the news yesterday, but has now fallen back to 1893 pence (10:00 GMT).

The news follows on from the sale of the bulk of Diageo's global wine business to Treasury Wine Estates for £390 million.

Diageo chief executive Ivan Menezes has been under pressure from investors to divest non-core businesses after a series of poor results.