Diageo Share Price tumble: who feels the hit first as dividend is halved and Guinness runs short in London

The immediate casualties are investors and everyday drinkers: the diageo share price has plunged after the company halved its dividend and trimmed forecasts for a second time in four months. Pubs in London face Guinness shortages, while US consumers are shifting away from pricier tequila — all at a moment when the new chief executive is promising capacity fixes and cost-driven change.

Impact-first: investors, London pub-goers and tequila buyers are front-line affected groups

Here’s the part that matters: shareholders saw more than £5bn wiped off market value and shares dropped nearly 13% on Wednesday, while London drinkers are encountering capacity constraints on Guinness. US consumers are buying less tequila, and the company explicitly links those behavioral shifts to squeezed household finances and broader consumer trends.

Diageo Share Price reaction and market hit

The company lost more than £5bn of market value on Wednesday and became the biggest faller on the FTSE 100 with a near 13% decline. The diageo share price reaction followed the announcement that the dividend was halved to 20 cents a share from 40. 5 cents a year earlier, and that annual sales and profit forecasts had been cut again.

What the new chief executive has done and promised

The first results under the new chief executive show decisive moves: the dividend was reduced, and guidance was lowered for a second time in four months. The CEO — who took the reins in January after an appointment that followed a four-month recruitment drive and an earlier abrupt resignation last July — described his first seven weeks as "pretty intense" and framed the dividend cut as necessary amid a challenged North American market.

The chief executive said the portfolio needs time and investment to be more competitive and that Diageo must invest in capacity and capability. He also defended the decision to halve the payout as difficult but right in the circumstances.

Consumer trends, product constraints and category signals

Weak demand in the US and China was cited as a driver of the lowered outlook. The company now expects organic sales to fall between 2% and 3% in 2026 and forecasts organic operating profit to remain flat. Consumption of spirits was described as fairly stable despite the rise of GLP-1 weight-loss drugs such as Mounjaro and Wegovy, but customers are taking fewer drinks per occasion — a shift the CEO labelled as a change in "serves-per-occasion" amid a significant squeeze on disposable income.

Pressure on consumer finances has already led US drinkers to buy less tequila, particularly the company’s Don Julio and Casamigos brands, in favor of cheaper alternatives. The company plans to offer smaller pack sizes to respond to squeezed budgets.

On beer, Guinness was praised as a "phenomenal asset" and identified as the fastest-growing beer brand in North America, but it also faces capacity constraints in London pubs. The CEO warned that geographic and capacity limits must be addressed quickly if pub drinkers of the "black stuff" are to see reliable supply.

• Dividend halved: from 40. 5 cents to 20 cents a share.
• Market impact: more than £5bn lost on Wednesday; shares fell nearly 13% that day.
• Guidance: organic sales expected to fall 2–3% in 2026; organic operating profit forecast to remain flat.
• Consumer shifts: fewer serves-per-occasion; GLP-1 drugs cited (Mounjaro and Wegovy); smaller packs planned.
• Product constraints: Guinness capacity issues in London; US tequila volumes down for Don Julio and Casamigos.

It’s easy to overlook, but the change in leadership style is sharp: the new chief executive brings a reputation for cost-cutting from long service at a major consumer group and has already moved to reallocate capital and adjust the payout.

Other coverage and lingering gaps

Another recent article carries the title "Client Challenge"; the text for that piece is unclear in the provided context. If you’re wondering why this keeps coming up, the company’s recent appointment, a prior abrupt executive departure last July, and the announcement last November that boosted shares before this week’s fall are all connected parts of the current narrative.

The real question now is how quickly the company can fix capacity constraints for Guinness in London, stabilise demand in North America and China, and whether the steps outlined by the chief executive will reverse downward pressure on the diageo share price. Forward confirmation would include a narrowing of the organic-sales decline, visible improvements in Guinness availability in London, or signs that smaller packs arrest declines in premium tequila volumes.