Group 1 - The French Trade Minister indicated that further efforts are needed in the framework trade agreement between the EU and the US, particularly in the digital services sector [1] - The spirits industry is suggested to be one of the sectors that should be exempt from tariffs [1]

法国贸易部长：关于欧盟与美国的框架贸易协议，数字服务领域仍需进一步努力，烈酒行业应是被豁免 的领域之一。 ...

Core Viewpoint - Diageo has initiated a comprehensive search for a new CEO following the resignation of Debra Crew, with CFO Nik Jhangiani serving as interim CEO. The company's stock has dropped 43% since Crew's appointment in June 2023, although it saw a temporary increase of 4.5% after the announcement of her departure [1][2]. Group 1 - The board is considering both internal and external candidates for the CEO position [1]. - Diageo's stock performance has been negatively impacted during Crew's tenure, attributed to declining demand in key markets such as China and the U.S., leading to a drop in sales [1]. - Only the Asia-Pacific region reported organic net sales growth among five regional markets in the first half of fiscal year 2025 [1]. - Diageo has suspended its mid-term earnings guidance due to potential impacts from U.S. tariffs, awaiting further clarity [1]. - A cost-cutting plan has been announced to ensure sufficient funds for future growth and to enhance operational leverage over the next three years [1]. Group 2 - The chairman of Diageo, John Manzoni, expressed gratitude for Debra Crew's contributions, particularly in navigating challenges posed by the pandemic and geopolitical issues [3]. - The board emphasizes the importance of finding the best candidate to lead Diageo forward and is confident in the company's ability to create long-term sustainable value [3].

Core Viewpoint - Diageo's CEO Debra Crew has resigned immediately, prompting the board to initiate a formal succession process for her replacement [1][4]. Group 1: Leadership Changes - Debra Crew joined Diageo in 2019 and became the first female CEO in June 2023, succeeding Ivan Menezes, who had led the company for ten years [4][5]. - Under Crew's leadership, Diageo's performance declined, with the stock price dropping over 43% since June 2023 due to slowing demand in key markets like the US, China, and Latin America [4][5][7]. - Javier Ferrán, the chairman, initially praised Crew as the best candidate to lead the company into its next growth phase [6]. Group 2: Financial Performance - Diageo's net sales and profits reached record highs in the fiscal year 2023, but the company faced a downturn shortly after Crew took over [5][7]. - In the first half of fiscal year 2024, Diageo's net sales declined, particularly in the Latin America and Caribbean markets, which saw a 23% drop in organic net sales [7]. - The company reported a 3.5% year-on-year decline in sales volume, with management focusing on premiumization to offset the impact of declining sales [7][8]. Group 3: Strategic Plans - In May 2023, Crew announced a cost-saving plan aimed at achieving $500 million in savings through the sale of several brands [4][11]. - Following her resignation, the future of this "acceleration plan" remains uncertain, with the company having already begun asset sales, including the sale of its Italian subsidiary and stakes in various brands [13][14]. - Diageo continues to invest in its Chinese operations, including a planned investment of 800 million yuan in a new whiskey distillery in Yunnan [14][15].

Core Viewpoint - The sudden leadership change at Diageo has triggered significant market reactions, prompting the company to expedite the search for a new CEO to stabilize potential market volatility [1][9]. Group 1: Leadership Changes - Diageo is currently seeking a new CEO following the unexpected departure of Debra Crew, who led the company since 2020 and implemented several strategic initiatives [3][9]. - Water Margin Group, a key player in Diageo's China strategy, has also undergone significant personnel changes, with Sudhindra Shivnegere Rajarao replacing Cristina Samin Suner as chairman and general manager [3][7]. Group 2: Financial Performance - Diageo's Q3 FY2025 report shows an organic sales growth of 5.9%, reaching $4.376 billion, indicating overall stable growth [6]. - However, regional performance reveals a stark contrast, with North America growing at 6.2%, Latin America and the Caribbean at 28.5%, while the Asia-Pacific region only saw a 1.6% increase, primarily due to weak performance in China and Southeast Asia [6][7]. Group 3: Strategic Implications - The leadership changes at both the group and regional levels are seen as a response to immediate market pressures and a proactive shift in global strategic planning for the next five years [9]. - The new leadership at Water Margin Group is expected to implement a more aggressive localization strategy to address the current growth challenges in the Chinese market [7][9]. - The appointment of Bence Bokor, who specializes in digital marketing and channel innovation, may be crucial for engaging younger consumer demographics [7].

Core Viewpoint - The global liquor stocks have experienced significant declines over the past three years, with high valuations and changing consumer preferences contributing to the downturn [7][9]. Group 1: Valuation Issues - Liquor companies were previously overvalued, with Chinese liquor leaders (e.g., Kweichow Moutai, Wuliangye) reaching price-to-earnings (PE) ratios of 40-70 times, significantly above the reasonable level of 15 times. Similarly, major Western liquor companies (e.g., Diageo, Pernod Ricard) had PE ratios of 40-50 times. The Federal Reserve's interest rate hikes and foreign capital withdrawal from emerging markets led to a substantial sell-off of high-valuation consumer stocks, including liquor, resulting in current PE ratios dropping to 10-20 times, with some companies seeing stock price declines of over 70-80% [7][9]. Group 2: Changing Consumer Trends - Post-pandemic, consumers are increasingly favoring low-alcohol beverages (e.g., beer, non-alcoholic drinks), leading to a decline in demand for high-end spirits (e.g., Moutai, whiskey), which are now viewed as "unhealthy" choices. The younger generation is drinking less, and liquor consumption has stagnated in certain countries (e.g., Japan, Western nations) [7]. Group 3: Weakening Luxury Status - Previously, high-end spirits (e.g., Moutai, Hennessy) were considered "social currency." However, during economic downturns, consumers are less inclined to maintain appearances, leading to a reduction in the perceived luxury status of these products [7].

Core Viewpoint - The European Union (EU) is preparing to respond collectively with other countries affected by the new tariffs imposed by the United States, particularly targeting a 30% tariff on products from Mexico and the EU starting August 1, 2025 [1]. Group 1: EU's Response to US Tariffs - The EU is coordinating with Canada and Japan to discuss potential joint actions against the new tariffs [1]. - The EU has a current retaliation list that will impact approximately €210 billion ($245 billion) worth of US goods, along with an additional list worth €720 billion for further measures [2]. - EU Commission President Ursula von der Leyen stated that while the EU has paused countermeasures until August 1, they are preparing further retaliation measures to ensure readiness [1][2]. Group 2: Trade Negotiations Focus - Ongoing negotiations between the EU and the US are centered on unresolved issues, particularly concerning automotive and agricultural tariffs [5]. - The preliminary agreement discussed includes a 10% tariff on most EU exports and a proposed 17% tariff on agricultural products from the EU [5]. - The EU aims to keep agricultural export tariffs below 10% and opposes mechanisms that would allow tariff reductions in exchange for investments, to prevent production shifts [5]. Group 3: Use of Trade Tools - The EU's most powerful trade tool, the Anti-Coercion Instrument (ACI), is not currently being activated, as stated by von der Leyen [3]. - French President Emmanuel Macron emphasized the need for credible countermeasures, including the ACI, if no agreement is reached before August 1 [4].

Group 1 - The U.S. has postponed the implementation of "reciprocal tariffs" from July 9 to August 1, highlighting the uncertainty and unpredictability of U.S. tariff policies [1] - The U.S. proposed a draft agreement to the EU, offering limited tariff exemptions only for specific sectors like aircraft and spirits, while not addressing key EU concerns in automotive, steel, aluminum, and pharmaceuticals [1] - The EU is facing strategic confusion due to the chaotic timeline and the unpredictability of U.S. policies, complicating their negotiation strategy [1] Group 2 - Internal divisions within the EU are exacerbating the situation, with countries like France and Spain opposing concessions to the U.S., while export-dependent nations like Germany and Italy favor a quicker agreement [2] - EU diplomats are concerned about the lack of guarantees from the U.S. against future policy reversals, raising questions about whether the EU should rush to compromise to avoid punitive tariffs [2] - The EU is grappling with the dilemma of whether a hasty agreement at the cost of concessions is preferable to holding out for a mutually acceptable deal [2]

Group 1 - The article discusses the potential short-term and non-binding nature of any preliminary trade agreement between the US and EU, with a focus on tariffs imposed by the US on imports from 14 countries starting August 1 [1][4] - The EU is negotiating to maintain a 10% baseline tariff while seeking exemptions for sensitive industries like aircraft and spirits, and discussions are ongoing regarding a 25% reduction in auto tariffs [1][5] - There is a significant divergence within the EU regarding the acceptance of agreement terms, with Germany advocating for a deal while France emphasizes a strong stance against high tariffs [5][6] Group 2 - The economic impact of US-EU trade negotiations is expected to vary, with a baseline scenario suggesting a potential agreement later this year that could exert short-term pressure on European economic growth and corporate profits [2] - Recent data indicates a decline in Germany's exports, particularly to the US, with a 7.7% drop in May, marking the lowest level in three years, which may signal challenges for European exports in the coming months [7][8] - The possibility of a breakdown in negotiations could lead to higher tariffs and economic recession for Europe, although there remains optimism for a compromise that could benefit both parties, particularly in defense spending and energy procurement [8]

Group 1 - The EU is preparing to make concessions to the US regarding tariffs, indicating a potential compromise in trade negotiations [1][2] - Currently, the US imposes a 50% tariff on EU steel and aluminum products, a 25% tariff on automobiles, and a 10% baseline tariff on nearly all other goods [2] - The EU has delayed its retaliatory measures, which would impose a 50% tariff on $210 billion worth of US imports, to allow time for trade negotiations [2] Group 2 - The US government has announced plans to impose tariffs ranging from 25% to 40% on imports from several countries, including Japan and South Korea, starting August 1 [3] - The White House has extended the implementation period for "reciprocal tariffs" by 90 days, pushing the start date from July 9 to August 1 [3] - Economic uncertainty is heightened as stakeholders are confused about the US's commitment to these tariffs and their potential impact on ongoing trade negotiations [3]