10 November 2025
If you are covering Diageo’s appointment of Sir Dave Lewis as its new CEO, please see the following comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“Diageo’s appointment of Sir Dave Lewis as its new chief executive is an interesting move. Having invested behind him at Tesco through its recovery, we have seen his capability when it comes to managing a business in need of steering in the right direction, and he put in place the fundamentals that Tesco has benefited from ever since. However, there are certainly differences to this business compared to those that he has worked in and managed before.
“Lewis’s experience is not in the spirits industry and is instead in more mainstream fast-moving consumer goods – not at the higher discretionary, aspirational end where customers are spending several hundred dollars for a bottle of spirits. While this is not to say he won’t be able to gain it, he will not enter the role with the experience of Diageo’s distribution model, particularly in the US and spirits.
“One immediate thing to note is that Tesco’s dividend was cut between Lewis’s appointment and him starting the role in 2014, so there is a slight worry that he will have had similar conversations with Diageo’s chair. Whether you call it ‘kitchen sinking’ or simply accepting the reality of an overleveraged balance sheet, there is a chance we could see a dividend cut that may help the business in the longer term, but from a short term perspective could negatively impact the stock price.
“With Lewis joining the business, Nik Jhangiani will be returning to his previous role of chief finance officer and how committed he will be to remaining in that post could be a concern. Having been passed over for the CEO title, human nature may come into play, and it would be understandable should he look to progress elsewhere. What’s more, when Dave Lewis joined Tesco, Alan Stewart was appointed as a new finance director alongside him. Lewis had a senior management team that very much bought into him and his project, and we may not see the same immediately at Diageo.
“Overall, Diageo remains a solid business with a strong brand and good distribution. There are several self-help measures the business could take – and the interim management team were already doing a lot of them – but there are also more cyclical and market related problems, and it is unclear when they will get better. US consumer spending and confidence, as well as Chinese regulation and the market environment for spirits will continue to be key issues for the business.
“Dave Lewis as Diageo’s chief executive is a good appointment, but it raises a few new risks that simply elevating the interim team to more permanent positions would have avoided.”
