The last four years have become more and more coarse for the shareholders of the global drink giant Diageo (LSE: DGE). When effective Covid-19 viral vaccines arrived in 2021, ending with blockades and social restrictions, the world was playing again. Therefore, the price of Diageo shares increased by closing by 4,036 Pens on December 31, 2021. Unfortunately, it has been down since then.

Diageo dives

At the beginning of 2022, Diageo shareholders could raise the glass or two to the company management team. However, the size of the share price has passed. Indeed, this supply is one of the FTSE 100The worst performers in five years.

As a reminder, this share in the FOTS fell by 14.2% in one month and 12.8% in six months. Even worse, the shares fell by 29.3% in one year and 29.9% compared to five. Meanwhile, FTSE 100 increased by 11.7% to one year and 58% compared to five. (All these returns exclude cash dividends.)

In tiny, having Diageo stocks from 2022 was an ungrateful task. I know this full well because my family portfolio bought shares for 2,780.8pa in January 2023.

A cure for a hangover?

At the 52-week highest level, Diageo’s shares affected 2677 Pens on October 18, 2024. As I write, it is 1,767 pence, valuing the group at 39.7 billion GBP (excluding debt). That is why the price of the shares broke down by 910 pens-ponads one-third (34%)-from the annual maximum.

Diageo has problems on three fronts. First, additional tariffs regarding US imports introduced (and later modified) by President Trump in April. These taxes make imported alcoholic beverages more costly for American drinkers, reducing the demand for Diageo brands.

Secondly, the industry is called for larger alcohol sales restrictions, including health warnings similar to those on tobacco products. In America, this campaign is directed by Robert F Kennedy JR, a controversial secretary for health and human services.

Thirdly, alcoholic beverages are increasingly costly due to the raise in manufacturer’s prices, higher duties and modern tariffs. That is why teenage adults drink less than previous generations. Millennium and generation are more and more often preferred by social media, video games and legal (and illegal) weed.

Since the raise in Diageo sales slows down and the margin under pressure, earnings have dropped. This increased the price to profit to 22.5. After the collapse of the share, the dividend performance is close to 4.4% per year. In other words, almost 100% of earnings concerns dividends, maybe a warning about future cutting?

What can this tanker change? The former director of Debra Crew announced her departure on July 16 and was replaced by NIK Jhangiani, a financial director. I imagine that the modern enduring general director will strive to neat the waist with modern terms and a thorough business review.

After losing 36.5% of our investment in Diageo, I am impatient for radical changes in the company. Despite this, I am not interested in selling at current price levels, preferring to support myself and hope for better results under the next CEO. For me, Diageo actions are very in the bargain container of Footies – where they can stay for some time!