Guinness parent, Diageo has cut its dividend as new chief executive, Dave Lewis, slammed the group’s “very poor” customer service as it reported sliding sales and profits.
Lewis on Wednesday said the FTSE 100 company’s board had “taken the difficult decision to reduce the dividend to a more appropriate level”.
Diageo cut its dividend from 103.5 cent a share for its 2025 financial year to a minimum of 50 cent a year going forward.
The former Tesco boss said this was “not an easy decision” but would create “financial flexibility”, adding that the business needed investment to make it more competitive.
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He said he would sell brands “if appropriate” but would not do so cheaply.
It came as the group reported a 4 per cent fall in net sales to $10.5 billion for the final six months of 2025, amid weakness in the US and China. It said tariffs were partly responsible for a 1.2 per cent decline in operating profit to $3.1 billion.
Diageo shares fell 11.4 per cent in trading on Wednesday.
Lewis, whose reputation for cost-cutting earned him the nickname Drastic Dave, has taken over Diageo after a tumultuous period at the maker of Guinness, Johnnie Walker and Captain Morgan.
When he started, Lewis became Diageo’s third chief executive in less than three years. Debra Crew departed last summer after the board failed to quash speculation that her chief financial officer, Nik Jhangiani, was angling for her job at the helm of the world’s biggest spirits maker.
Investors have been eagerly anticipating Lewis’s assessment of the business, which has had a bruising few years of profit warnings, leadership turmoil and fears that weight-loss drugs and changing drinking behaviours would prove a long-term drag on the spirits category.
Lewis said weight-loss drugs and changing “attitudes” towards spirits were affecting sales but that the biggest challenge was the squeeze on consumers’ disposable incomes, particularly in the US.
The Yorkshire-born executive also said that Diageo’s customer service for its distributors and retail customers was “frankly very poor”, and meant that the group was failing to capitalise on demand for popular brands such as Guinness.
“The idea that we can’t service the demand that’s there is both a source of significant regret, but it’s also an opportunity for us,” he said.
He set out to end shortages of Guinness, the company’s fastest-growing brand, which have prompted a backlash from pub groups. “If you’ve tried to buy a pint in London, you also know that we have some capacity constraints too,” he said, adding that this would be addressed quickly.
Guinness sales rose 10.9 per cent on an organic basis in the final six months of 2025. – Copyright The Financial Times Limited 2026
