Diageo's Moët Hennessy partnership under strain as profits halve

Diageo's decades‑long alliance with Moët Hennessy, in which it holds a 34% stake in LVMH's champagne and cognac division, has seen its contribution to Diageo's earnings drop sharply. The partnership generated $455 million in the fiscal year ended June 2023, but that figure fell to $219 million for the year ending June 2025, a decline of more than half.

Investors say new chief executive Dave Lewis is focused on reviving performance in core markets, especially the United States, and may reassess the Moët Hennessy relationship once the broader recovery is clearer. Tensions have risen over joint distribution agreements that have cost Diageo money and market share in countries such as France. The alliance has also been tested by past disputes, including a 2020 arbitration over a €181 million dividend withheld by Moët Hennessy during the pandemic.

Lewis is scheduled to unveil his turnaround plan on 6 August, and analysts note that changing consumer habits—such as the rise of cannabis‑infused cocktails—add pressure to the partnership’s future.