Guinness maker Diageo hires former Tesco boss for top job

Former Tesco boss Sir Dave Lewis has been appointed as chief executive of Diageo as the Guinness and Johnnie Walker drinks giant looks to boost its flagging performance.

Sir Dave will take on the role on January 1, replacing Nik Jhangiani – the group’s previous chief financial officer – who has been acting as interim chief executive since Debra Crew resigned abruptly in July.

Mr Jhangiani will revert back to being chief financial officer once Sir Dave starts in the post.

Sir Dave will resign as chairman of consumer healthcare firm Haleon at the end of December to take the helm at Diageo.

Shares in Diageo jumped around 8% higher in morning trading on Monday after the announcement.

He led Tesco as group chief executive for six years until 2020, having previously spent nearly 30 years at Ben & Jerry’s and Marmite firm Unilever earlier in his career.

His appointment comes at a challenging time for Diageo as it grapples with weaker sales and a sinking share price.

On Thursday, the group alerted over tough trading once again, cautioning over weaker demand from consumers in China and the US, meaning it could sell fewer drinks this year, which sent its shares slumping further.

Diageo chairman Sir John Manzoni, who led the appointment process, 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 that Dave will work with the team to take Diageo into its next successful chapter in the evolving consumer environment.”

Sir Dave 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.”

Sir Dave, who was knighted in the 2021 New Year’s Honour’s, will be paid an annual salary of £1.5 million, plus £210,000 in pension contributions, as well as performance-based bonuses.

Diageo has seen its share price pummelled in recent years, with the FTSE 100 stock down by a fifth over the past six months and nearly halving in value over the past two years.

Ms Crew had launched a major cost-cutting plan just months before she stepped down, looking to save 500 million US dollars (£380 million) as its trading has come under pressure and as it faced a 150 million US dollar (£114 million) annual hit from higher US tariffs.

Its sales had already dropped for the first time in around four years during the 2023-24 financial year, dragged lower by a weaker performance in Latin America.

Her resignation in the summer followed just a two-year tenure.

Ms Crew had taken over from former boss Sir Ivan Menezes, who died in June 2023, becoming its first female chief executive.

Richard Hunter, head of markets at interactive investor, said: “The announcement is clearly being seen as a potential inflection point for the group given the new hire’s proven ability in brand building.”

Neil Wilson, UK investor strategist at Saxo Markets, added: “His laser focus is going to be vital to turning things around after years of trouble and a profits warning last week sent shares to a 10-year low.

“He brings strategy and execution.”