Guinness owner Diageo shares rocket after appointment of ‘Drastic Dave’
Shares in FTSE 100 drinks giant Diageo have rocketed after the appointment of a new chief executive with an impressive turnaround record.
News of the appointment of retail and consumer goods veteran Sir Dave Lewis saw shares in the struggling giant rise 6.8 per cent in early morning trading to 1,845p, rebounding from their sharp drop last Thursday following the group’s latest trading update.
The Board appointed Sir Dave to take the role of chief executive and executive director as of 1 January, 2026, crediting the appointment on his “extensive experience”.
Lewis served as group chief executive of Tesco from 2014 to 2020, overseeing a comprehensive turnaround strategy, before becoming the chair of global healthcare company Haleon in 2022 and non-executive board director of Pepsi Co.
He will step down from his role at Haleon on 31 December 2025.
Sir John Manzoni, Diageo’s chair, said: “Having conducted an extensive and thorough global search, the board unanimously felt that Dave has both the extensive CEO experience and the proven leadership skills in building and marketing world-leading brands, that is right for Diageo at this time.
“We are confident Dave will work with the team to take Diageo into its next successful chapter in the evolving consumer environment.”
‘Drastic Dave’
Before his tenure at Tesco, Lewis spent nearly three decades at consumer goods juggernaut Unilever, primarily in executive committee roles.
Lewis was dubbed “Drastic Dave” during his time at Unilever, reflecting a relentless focus on cost-cutting and rationalisation that saw the number of products the group produced fall from 1,600 to 400, while headcount was reduced significantly.
These actions ultimately led to a 40 per cent reduction in group expenditure in 2007.
Lewis was also responsible for the turnaround of Tesco, following a period where the supermarket was widely regarded to have lost its way. Sales had been damaged by the so-called ‘horsemeat scandal’ and customers had been lured away by cheaper prices from competitors Aldi and Lidl.
Lewis repaired relations with suppliers and engaged with employers in his bid to repair the supermarket’s reputation, yielding impressive results.
Dan Coatsworth, head of markets at AJ Bell, said Diageo has “played a blinder by hiring the man who saved Tesco”.
He said: “Dave Lewis is ‘Mr Fixit’ as far as the market is concerned, joining the grocer with no retail experience and putting it back on track after a difficult period.
“Convincing him to return to CEO life will have been a challenge. Lewis has only held chair and advisory positions since leaving Tesco in 2020, so there must have been something special about Diageo for him to put on his CEO boots again.
“The £1.5m salary is certainly tasty, but Lewis is more likely to have been driven by the size of the task.
“Pull off a second business recovery of this scale and he’ll become a legend in the business world.
“This is a significant hire and a pleasant surprise. The seven per cent share price jump on the news says it all.”
Facing challenges
Diageo’s interim chief executive Nik Jhangiani, who took up the role following the departure of Debra Crew in July after just two years in charge, will resume his position as chief financial officer in January.
Deirdre Mahlon, who returned to Diageo as interim chief financial officer, has confirmed she support the company through the transistion.
Lewis said: “The market faces some headwinds but there are also significant opportunities.
“I look forward to working with the team to face these challenges and realise some of the opportunities in a way which creates shareholder value.”
Diageo, whose portfolio contains Guinness and Baileys, dropped its profit guidance in its latest trading update last Thursday, after weak demand in China and the US damaged sales expectations.
The group reported net sales of $4.9bn for the three months to the end of September, a fall of 2.2 per cent on last year.