Diageo slashes dividend and vows to address Guinness capacity constraints in London

The Guardian World

by Joanna Partridge

February 25, 2026

AI-Generated Deep Dive Summary

Diageo, the world’s largest spirits maker, has announced significant measures in response to challenging market conditions. The company, which owns well-known brands like Guinness, Smirnoff vodka, and Johnnie Walker whisky, has slashed its dividend and reduced its annual sales and profit forecasts for the second time in four months. This decision comes amid weak demand in key markets such as the US and China, as highlighted in their first financial results under the leadership of new CEO Sir Dave Lewis. The company also revealed that capacity constraints are impacting Guinness drinkers in London pubs. Diageo’s latest financial update reflects broader economic factors affecting consumer spending on luxury goods and alcohol, particularly in the US and Chinese markets. These regions have seen reduced demand for premium spirits, leading to a decline in sales and prompting Diageo to revise its forecasts downward. This move underscores the challenges faced by global beverage companies adapting to shifting consumer preferences and economic conditions. The company’s strategic response includes not only financial adjustments but also efforts to address operational limitations affecting their iconic Guinness brand in London. As Diageo navigates these complexities, the broader implications for the spirits industry highlight the importance of adaptability in a competitive and evolving market landscape. For readers interested in global business trends, this story offers insight into how major corporations are managing economic uncertainties. By cutting dividends and revising forecasts, Diageo is signaling a focus on long-term stability despite short-term challenges. The company’s approach reflects broader industry shifts, including the need to innovate and respond to market fluctuations while maintaining profitability. Ultimately, Diageo’s actions demonstrate the complexities of operating in a global market where demand can fluctuate rapidly. As they work

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Originally published on The Guardian World on 2/25/2026