Diageo to appoint former senior UK civil servant as chair

Diageo plans to appoint as chair Sir John Manzoni, a former chief executive of the UK civil service, while the drinks group is trying to draw a line under a bruising year that has triggered a slump in its share price.

Manzoni, who joined Diageo’s board as a non-executive director in 2020, is chair of energy business SSE and worked for BP for 24 years. He will succeed Javier Ferrán when he retires in February 2025 after seven years in the role, the London-listed company said on Tuesday.

The company’s shares are down 19 per cent over the past year, after a profit warning in November because of destocking (when retailers hold off on ordering as they run down inventories built up when demand was high). This led to a slump in sales of more than 20 per cent in Latin America.

Analysts were unimpressed by Diageo chief executive Debra Crew’s initial handling of the warning. They questioned whether the supply chain issues were confined to Latin America, which accounts for 11 per cent of sales, and asked why the situation had not been flagged earlier.

Trevor Stirling, analyst at Bernstein, said that Manzoni was “undoubtedly a very experienced beverages non-executive director” but he believed Diageo “will miss” Ferrán’s in-depth industry knowledge as former chief of Bacardi.

“That said, Diageo’s recent turbulent six months took place when Javier was chairman,” Stirling added. “Given the long transition period we look forward to Javier playing a major role putting Diageo back on a more even keel before he hands over to Sir John in February next year.”

Crew, a former chief executive of Reynolds Tobacco who joined Diageo in 2019 as a board member, has also had to contend with doubts over growth in the US, its most important market, where sales have been hit following the pandemic boom years.

The share price has struggled to recover. In January, the company’s net sales fell 1.4 per cent to $11bn in the six months to December, down 0.6 per cent on a like-for-like basis.

Manzoni said “I look forward to supporting the executive team to ensure that we deliver on our potential”, while Crew said Ferrán had been “an invaluable source of strategic counsel and advice for me and our wider leadership team, and I want to thank him personally for the role he has played in stewarding the business so successfully.”