Per media reports, leading U.K.-based brewer Diageo plc DEO has been sued by Kentucky residents for polluting the locality.
The warehouses at Louisville, KY that distill and age whiskey allegedly emit ethanol gases. Per the lawsuit, these emissions these emissions lead to formation of a "whiskey fungus" on properties in the vicinity.
In Feb 2014, Diageo started the Orphan Barrel Whiskey Distilling Company to source rare and old whiskeys from distilleries around the world. Orphan Barrel Whiskey launched two variants of old whiskey — 20-year-old Barterhouse Whiskey and 26-year-aged Old Blowhard Whiskey — at selected locations in March 2014.
One such distillery is located in Louisville. In Feb 2014, Diageo began the restoration of the historic Stitzel-Weller Visitor Center. The Stitzel-Weller Distillery in Shively, operational since Derby Day 1935, stores and rests barrels of various whiskeys.
We note that in order to focus on its spirits business, Diageo plans to sell off the non-core assets. Recently, the company decided to sell a majority of its U.S. and British wine operations to the Australian company, Treasury Wine Estates. The $552 million deal is expected to close at the end of 2015.
Earlier, in July, Diageo divested the luxury hotel and golf resort, Gleneagles, located in Scotland, to private equity firm Ennismore Capital, to cut costs and boost profits. The move reaffirmed its plans to focus more on the core spirits business.
In the recently reported third-quarter 2015 results, net revenue declined and volume dipped 0.8% year over year due to currency headwinds.
Currently, Diageo has a Zacks Rank #4 (Sell). Investors interested in the beverage sector may consider Constellation Brands Inc. STZ sporting a Zacks Rank #2 (Buy). A couple of consumer staples stocks worth a look are Primo Water Corp. PRMW and Dr Pepper Snapple Inc. DPS carrying a Zacks Rank #2 (Buy).
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