Diageo Shares Surge As Sir Dave Lewis Named Chief Executive

Diageo saw its market value rise by approximately £2 billion following the announcement that Sir Dave Lewis would become chief executive of the FTSE 100 drinks group. The appointment comes at a pivotal time for the company, which has been facing shareholder pressure and operational headwinds after a challenging period marked by leadership uncertainty, declining share price and weakening global demand for its premium brands.

The drinks group, known for brands such as Guinness, Smirnoff and Johnnie Walker, has endured a turbulent two years. Key challenges include abrupt leadership changes, the impact of US tariffs, shifting consumption habits and reduced appetite for premium products. Shares had fallen more than 30 per cent since the beginning of the year and touched a ten year low after a recent profit warning.

Sir Dave Lewis, who will assume the role from January, brings deep experience from his tenure as chief executive of Tesco between 2014 and 2020, where he guided the retailer through a significant accounting crisis. His track record includes decades at Unilever, where he earned a reputation for decisive management and cost cutting. The Diageo board stated that his appointment followed an extensive global search and unanimously emphasised his brand building and operational acumen as vital strengths for the company at this juncture.

Lewis takes the position after interim chief executive Nik Jhangiani, who stepped in after Debra Crew’s abrupt departure in July. Jhangiani will return to his chief financial officer responsibilities at the end of December. Lewis is also expected to relinquish his position as chairman of Haleon to focus fully on Diageo, though he will remain a non executive director at Pepsico.

City analysts and investors responded positively to the appointment, with Diageo shares jumping more than 8 per cent during trading before closing up 5.2 per cent at £18.17. Jefferies commented that the move provided much needed certainty over Diageo’s leadership, while Bernstein noted Lewis’s extensive experience at major consumer facing companies, despite his lack of background in the spirits industry. RBC analysts cited the expectation that Lewis will drive both sales growth and organisational change.

Lewis’s annual remuneration will be £1.5 million plus pension contributions worth £210,000 and an undisclosed package of shares and bonuses. He acknowledged the difficult trading environment but highlighted significant opportunities for the business moving forward.