East African Breweries (EABL), the Kenyan unit of Diageo Plc, has dismissed a media report that its parent company wants to sell the Tusker beer brand as part of broader cuts.
US news outlet Axios reported last month that Diageo was looking to sell Tusker along with other beer brands including Ireland-based Smithwick's, Kilkenny and Harp Lager, saying they were a margin drag on the rest of the business.
In an interview with Reuters, EABL CEO Jane Karuku denied the brand would be sold. "Those are market speculations," she said, declining to comment further.
But its margins were compressed by higher costs of production and financing, after the Kenyan shilling, the currency of its biggest market, weakened, and interest rates rose.
EABL would focus on improving margins in the second half to cushion the company's performance, Karuku said.
In November 2023, Diageo warned that sales in Latin America and the Caribbean would fall by over 20% during the first half of its fiscal year, partly blaming a build-up of unsold stock in Mexico.
The holiday season is critical for Diageo re-establishing sales momentum in Latin America, but demand for premium brands like Johnnie Walker and Tanqueray gin continues to lag cheaper alternatives, according to Mexican wholesalers.