London, January 19, 2026, 08:35 GMT — Regular session
- Diageo shares slipped in early London trading, trailing a volatile broader market.
- The spotlight has returned to rising unsold spirits inventories within the sector.
- Investors are now eyeing Diageo’s upcoming results for fresh details on pricing and inventory.
Diageo (DGE.L) shares fell 1.3% to 1,634 pence by 0828 GMT on Monday following a weekend report that spotlighted the large amounts of unsold inventory piling up in the global spirits sector. 1
This matters now because inventories are where the risks lie in spirits. A significant portion of costs is tied up in whisky, cognac, and tequila, which are produced years in advance and can’t be moved quickly.
Diageo faces a straightforward risk: excess inventory can lock up cash and push producers toward deeper discounts. Investors are quick to penalize even a whiff of weakening pricing power, often before it impacts the company’s earnings.
The Financial Times reports that five major listed spirits companies are holding a record $22 billion in ageing stock. This surge follows a pandemic-era ramp-up in production, which has since met weaker demand. Diageo’s maturing inventory alone has swelled to $8.6 billion, according to the report, which defines maturing inventory as spirits kept to age before being sold. “The build-up of inventories is unprecedented,” said Bernstein analyst Trevor Stirling. 2
The report also highlighted producers scaling back output and shutting down distilleries to prevent stockpiles from growing further, despite rising debt levels. It warned of a potential price war if companies move too quickly to sell bottles faster than demand can keep up.
The report named Pernod Ricard, Brown-Forman, and Rémy Cointreau as peers. Rémy stood out as an extreme example, with ageing inventory nearing its market value—a sharp reminder of how swiftly balance-sheet stress can spill over into equity concerns.
Markets turned volatile as U.S. President Donald Trump threatened tariffs on goods from multiple European countries, linked to a spat over Greenland. “The U.S.-EU trade war is back on,” said Tina Fordham, geopolitical strategist and founder of Fordham Global Foresight. 3
Headlines like that quickly drain risk appetite among global consumer groups. Tariffs complicate cross-border pricing, hitting spirits makers especially hard—those with extensive distribution and premium brands counting on consistent demand.
But here’s the catch: slashing production is a blunt tool when it comes to aged spirits. If demand rebounds within a year or two, distillers risk running short and scrambling to catch up at higher costs.
Traders will be eyeing Monday’s dip to see if buyers step in or if inventory concerns continue to drag down forecasts across the sector. For Diageo investors, the key date is February 25, when the company reports its interim results. 4
