Diageo shares rise 4% after Guinness restricts pub supply for Christmas
Diageo, the owner of Guinness, has restricted the amount of the stout pubs can order in the lead up to Christmas due to “exceptional demand”.
Despite operating at maximum production capacity, the brewer has implemented order limits in the UK to manage supply.
This surge in popularity is attributed to several factors, including increased appeal amongst women and young adults, alongside a boost from recent rugby internationals. Diageo’s marketing efforts, featuring collaborations with influencers like Lewis Capaldi and Jason Momoa, have also contributed to this growth.
To ensure sufficient stock through the festive season, Diageo is allocating supplies on a weekly basis. Data from food and drinks industry research firm CGA reveals that while overall beer consumption dipped slightly between July and October, Guinness draught sales saw a significant increase of over 20%.
In response to this demand, Diageo has invested heavily in its St James’s Gate brewery in Dublin and is constructing a new facility in County Kildare.
Danni Hewson, head of financial analysis at AJ Bell, said: “News that Diageo is having to limit the amount of Guinness that pubs can buy in the run up to Christmas seems to have filtered through to investor sentiment today.
“Shares in the drinks maker were up more than 3% after it reported that despite operating at 100% capacity, demand for its black stuff will make it impossible to quench the thirst of all the would-be drinkers this Christmas.
“The popularity of the drink has been helped along by its low alcohol version and more younger drinkers and women are now also opting for a pint, putting pressure on supplies.
“Whilst many drinks makers have struggled as consumers looked to trade down or drink less alcohol, Guinness has managed to find a sweet spot and news that it could be in short supply is likely to up its cache.”
The shortage of Guinness in the UK will not affect the supply in the island of Ireland.
A spokesperson from Diageo Ireland said: “As we move into the busy Christmas period, we will make all deliveries to our customers across the island of Ireland, as planned and without disruption.”