Spirits Giant Diageo Announces Sale of Pampero Rum Amid Sell-Off Spree and Stock Slump

(Photo: Pampero Rum)

British beverage giant Diageo, the heavy hitter behind Guinness, Casamigos and Captain Morgan and many more prominent brands, is continuing a streak of sell-offs amid waning sales figures and rumors of a takeover bid.

On Wednesday, the company announced the sale of Venezuelan rum brand Pampero to spirits firm Gruppo Montenegro, best known for Italian-made products like Amaro Montenegro and Rosso Antico Vermouth. Founded in 1938, Pampero purports to be the inventor of the first Venezuelan rum aged for more than two years. Outside of its home country, the rum is particularly popular in Italy and Spain, explaining its acquisition by a European liqueur producer.

Commenting on the shift of hands, Diageo President of India and Europe John Kennedy remarked:

“The sale of Pampero demonstrates our disciplined and strategic approach to capital allocation. It will allow us to concentrate on our portfolio’s core areas of strength as we accelerate towards our ambition; to be one of the best performing, most trusted and respected consumer products companies in the world. Looking forward, Pampero is well positioned for its next chapter of growth.”

Behind the scenes, the Pampero rum acquisition reflects larger troubles for the famed British spirits company, which has witnessed an especially tumultuous year with investors and international markets.

Earlier this month, the company was reportedly eyed as the prime candidate for a takeover bid after it dropped to a four-year low stock price last seen in April 2020. Though Diageo boasts a generous market cap of over $70 billion, the finer details haven’t been adding up as of late; sales slumped 23% in Latin America and the Caribbean last year, contributing to a $158 million net sales decline across the board.

While the average consumer is likely familiar with lucrative ventures like Johnnie Walker, Smirnoff, Baileys, Ketel One and Don Julio, it’s Diageo’s lesser-known imprints that appear to be dragging the portfolio down.

As a result, the company has triggered a slew of sell-offs as it attempts to adjust its strategy. In 2022, Diageo sold 32 locally-produced spirits brands in India, followed a year later by the sale of Windsor Global whisky to a South Korean investment firm. Over the past month, Diageo has accelerated its pace with the back-to-back sales of Guinness Nigeria and Safari Liqueur. Pampero rum is now the third brand to be sold in this apparent spree.

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