Reuters reported that the major spirits supplier, Diageo, will cut $500 million in costs and get rid of a hefty amount of assets in order to lower its debts by 2028. The outlet reported that a major reason for the shift was the impact of a $150 million loss due to the 10% Trump tariff.
The outlet reported that Diageo will cull its portfolio, and intends to cut “some significant assets.” The supplier owns major assets like Johnnie Walker and Guinness. Those flagship brands appear to be safe, for now.
“We see… some opportunities for what I would call substantial changes versus portfolio trimming,” said Diageo Finance Chief Nik Jhangiani to investors, according to Reuters. “It’s clearly going to be above and beyond the usual smaller brand disposals you’ve seen over the last three years.”
The spirits “supertanker” claims it will additionally cut funds to advertising and its supply chain. The move should give Diageo $3 billion per year from 2026, according to the outlet.
Diageo has made plenty of adjustments to its portfolio over the last few years. The brand sold Cacique Rum to Bardinet in January. The brand made another rum sale in July 2024 and offloaded Pampero Rum to Gruppo Montenegro.
How Trump Tariffs Have Led To Economic Global Uncertainty
Since his inauguration in January, President Donald Trump has imposed a series of sweeping on-again, off-again tariffs that have made America’s economic outlook appear increasingly grim and volatile. Though the president claimed during his campaign that other countries would pay for the tariffs, it appears he has finally admitted that Americans would be footing the bill.
Quartz reported on Monday that Trump urged retail giant Walmart to pay some of the cost of his imposed tariffs and spare passing the costs on to customers.
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump posted on Truth Social. “Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as it is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching and so will your customers!!!”
Though Trump claimed Walmart made “BILLIONS OF DOLLARS,” Quartz reports the highly capitalized claim is false. The big box retailer does bring in over $600 billion in annual revenue, but its profit margins land at around 2.5%. The outlet reported that though its gross revenue was $681 billion, its operating income — the money Walmart walked away with — was just $29.3 billion.
As far as Diageo is concerned, it appears the company made preparations to navigate the blows of Trump tariffs. As far as a bright spot is concerned, the projected losses of the tariffs amounted to a higher cost of $200 million, and the outcome is slightly lower.
The company did report that it might lower its hiring count as it navigates the new, uncertain economic reality. Yet Diageo’s stock is still continuing to drop. On Monday, it ticked down by .7%. In spite of the news, shareholders don’t appear to be that worried.
“You can see that (Diageo) is gradually getting its act together again,” Manager of VT Tyndall Global Select Fund Richard Scrope, according to Reuters.
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