Diageo appoints former Tesco boss Sir Dave Lewis as new CEO

After months of uncertainty, Diageo has named Sir Dave Lewis as its next CEO. The former Tesco leader, credited with turning around the supermarket giant, will take charge in January as the company looks to revive growth and investor confidence.

Diageo has ended its five-month search for a chief executive to replace Debra Crew. The former Tesco boss Sir Dave Lewis will take up the role at the start of January.

Crew left abruptly by “mutual consent” in July; since then, finance director Nik Jhangiani has been running the business on an interim basis. He will revert to the finance role when Lewis joins the drinks giant.

Track record of turnaround

Lewis, 60, ran Tesco between 2014 and 2020, during a period of recovery for the retail colossus.

In his six years at the helm, the shares gained more than 50% and Diageo will be hoping that he can repeat that success in even shorter order, given its own slump in the past couple of years.

Market reaction and timing questions

Last week, the effective profit warning with the first quarter results sent the shares to a 10-year low.

The news that Lewis is taking the Diageo top job sent them up by almost 8% in early trading in London today, recouping the ground lost last week when no news was forthcoming.

Questions remain as to why the board were unable to announce Lewis’s appointment at last week’s shareholder meeting but felt able to do so just three days later.

A seasoned brand leader

Lewis is not only a tried and tested CEO but is also one of Britain’s most experienced operators in the field of brands and consumer goods. Before joining Diageo, he will step down from his role as chair at pharmaceutical company Haleon.

Before joining Tesco, he spent almost three decades at Unilever and was knighted in 2021 for his contribution to business and the food industry.

Disappointment for the interim chief

Not landing the chief executive’s job will be a disappointment to Jhangiani, who, reports suggest, had lobbied hard for it. His critics, however, pointed out that he had never run a major international corporation, let alone one valued at approaching £40 billion.

Despite thanking Jhangiani for his “excellent leadership” as interim CEO, chairman Sir John Manzoni and the board seemingly felt they wanted a big beast for the top job.

Board confidence and outlook

Manzoni said: “The board unanimously felt that Dave has both the extensive CEO experience and the proven leadership skills in building and marketing world-leading brands that are right for Diageo at this time.”

Lewis said: “Diageo is a world-leading business with a portfolio of very strong brands, and I am delighted to be joining the team. The market faces some headwinds, but there are also significant opportunities.”

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