Diageo inks deal to offload Italian operations
Smirnoff owner Diageo has agreed to sell its Italian operations to NewPrinces to ‘optimise its global production network’, saving hundreds of jobs.
Italian company NewPrinces (formerly known as Newlat Food) initially signed an exclusivity agreement in May for the purchase of Diageo’s Santa Vittoria d’Alba site in Piedmont.
Diageo confirmed at the time that it was in “early-stage conversations”.
A binding agreement has now been signed and the transaction is expected to be completed later this year, subject to regulatory approvals.
Diageo said the move aligned with its ‘ongoing commitment to optimising its global production network to better serve its markets’.
London-headquartered Diageo operates production sites in the UK (including 30 in Scotland), Ireland, Mexico, Italy and Guatemala.
In January this year, Diageo closed Chase Distillery in England and moved production to Scotland.
A month later, the group confirmed it would shut its 160-year-old manufacturing facility in Hyderabad, India, due to ‘evolving market dynamics and ageing infrastructure’.
NewPrinces swoops in to save jobs
The deal with NewPrinces maintains the site’s current workers and a fixed-term service agreement will be in place once the transaction is completed to enable a smooth transition.
In May, NewPrinces confirmed the plan included the protection of all 349 workers currently employed in the Piedmont plant through the maintenance of production and the introduction of new products.
According to NewPrinces, the Piedmont site generated approximately €229.8 million (US$266.5m) of revenue in the year ending June 2024, with earnings before interest, taxes, depreciation, and amortisation of €20.4m (US$23.6m) and net profit of €18.3m (US$21.2m).
Diageo has not confirmed what products are made at its Italian site, but its 2024 annual report noted that the company makes vodka, rum, RTDs and non-alcoholic drinks in the country.
In 2019, Diageo opened a €420,000 (US$469,000) distillery in Santa Vittoria, Italy, and added a super-premium gin to its Reserve portfolio – Villa Ascenti.
NewPrinces describes itself as the leading player in the UK soft drinks category, where it generates approximately €350m (US$392m) of revenue in the market.
NewPrinces believes the move would also optimise production costs and logistics by integrating the Piedmont site into its broader European network.
For the first three months of 2025, Diageo reported a 0.4% sales dip in Europe due to ‘softness in spirits across key markets’.
The group’s sales in Europe rose by 1% in the last six months of 2024, however Southern Europe was down by 6% and Northern Europe declined by 10%.
In March this year, Diageo backed out of its partnership with Distill Ventures, confirming it would no longer be bringing new brands into the accelerator programme.
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