Diageo (DGE) has agreed to sell its wine interests in Argentina to the country’s leading producer and distributor, Grupo Peñaflor, for an undisclosed sum.
The sale includes the Navarro Correas and San Telmo brands, together with production sites and vineyards. As part of the deal, Peñaflor will also take over distribution of Diageo’s international spirits brands in Argentina, and, after an interim period, the two companies will jointly produce Diageo’s domestic spirits brands in the country.
Diageo will incur an exceptional loss before tax of approximately £60m when the deal completes, the drinks giant said in the London Stock Exchange announcement.
It follows Treasury Wine Estates’ $552m acquisition of the bulk of Diageo’s wine interests last month – including the UK’s second largest off-trade brand, Blossom Hill, and the US-based Chateau and Estate Wines.
Diageo CEO Ivan Menezes said the Treasury deal reflected that wine was no longer “core” for his company. “Diageo’s strategy is to drive stronger, sustained performance through focus on our core portfolio and today’s announcement is another element of that strategy in action,” he said.