Diageo Shares Slump: China Baijiu Down 56% & US Weakness

Global Consumption Shift Impacts Spirits Giant: Diageo's Strategic Adjustment Amid Core Market Slowdown

Global spirits giant Diageo announced its FY2026 interim results, reporting a 2.8% decline in organic sales driven by weakness in the US market and a sharp drop in Chinese spirits sales. New CEO Sir Dave Lewis described the performance as "mixed" and outlined priority strategies, including strengthening brand competitiveness and redesigning the operating framework. To increase financial flexibility, the group decided to halve its dividend to address current market challenges.

North America sales fell 6.8% due to slowing Tequila demand. Asia Pacific saw a 11.1% decline, with Greater China particularly hard hit by policy changes and official bans, causing Baijiu sales to plunge over 50%. In contrast, the Indian market grew driven by Royal Challenge and Black & White, while Europe benefited from strong demand for Johnnie Walker in Turkey.

Total spirits sales fell 6%, with Baijiu down 56% and Tequila down 17%. Casamigos and Don Julio saw significant declines in the US, but the Scotch category recorded slight growth. Flagship brand Johnnie Walker remained steady, and beer brand Guinness achieved double-digit growth, demonstrating strong market resilience.

Looking ahead, Diageo lowered its FY2026 outlook, expecting organic sales to decrease by 2% to 3%. Despite ongoing cost-saving measures, US tariff policies have added uncertainty. The group will continue to monitor risks and attempt to restore growth momentum through brand optimization to solidify its leadership in the spirits industry.

📅 Publish Date: 2026-02-25

🔗 Source: https://www.thespiritsbusiness.com/2026/02/chinese-spirits-plunge-56-in-diageo-h1/