Diageo ‘in talks’ with Treasury over wine unit

Diageo is reportedly in “detailed talks” with Treasury Wine Estates about selling off its Global Wine Unit, which includes brands like Blossom Hill and Piat d’Or.

Blossom Hill is Diageo’s Californian wine brand (Photo: Blossom Hill)

The drinks giant behind global brands like Johnnie Walker and Smirnoff is planning offload its winemaking arm in response to “City pressure” to improve its performance, Sky News reports.

A deal could be announced within the month, sources said, but as no transaction has been made it could still fall through.

Diageo has been contacted by the drinks business for comment.

The London-based company has been looking to sell off its wine business for some time as it only accounts for a small proportion its global revenues.

In May, the drinks business reported that the company had been approached over its Blossom Hill and Sterling Vineyards wine labels by an “unnamed third party”.

Pressure on Diageo CEO Ivan Menezes has been mounting in recent months over what investors feel is the company’s poor performance, which could be partly remedied by the selling off of non-essential assets.

Diageo gave guidance to investors on 23 September saying that while it was marking down its profit outlook for 2016 by £150 million, its other predictions regarding sales growth were proving true.