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Diageo looks for wine acquisitions

Published:  23 July, 2008

Drinks multinational Diageo is eyeing up potential acquisitions in thein the beer, wine and spirits market, and is even considering relatively low-production wineries.

That's the view of a report released today by analysts CTI Investment Research, which says that "Diageo continues to review potential acquisitions in wine (both small scale and potentially more significant)"

Wine forms around 5% of the company's net sales. However, the company is anxious to dispose of 20% of those overall sales - the beer market - which "will continue to act as a drag on growth", said CTI report.

"Risks to top line growth exist" at Diageo, according to the report, "especially in emerging markets and the US".

CTI also believes that Europe represents the best opportunity for growth at Diageo, "with a return to more stable Guinness volumes in GB/Ireland and strong organic growth (40%-60%) in some of the Central European and Eastern European markets."