3 alcoholic beverages stocks to add to your portfolio in 2022

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3 alcoholic beverages stocks to add to your portfolio in 2022

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 3 alcoholic beverages stocks to add to your portfolio in 2022
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Highlights

  • As per the latest release by the Office for National Statistics (ONS) the number of distilleries in the UK rose to 820 in 2021.
  • The boom in the industry is mainly due to a freeze in spirit duty by the Chancellor during the budget announcement in October.

The number of UK spirits producers rose significantly in the last one year amid an increase in demand for spirits during the pandemic. As per the latest figure released by the Office for National Statistics (ONS), the number of distilleries in the UK rose to 820 in 2021, up from 710 in 2020. Small or Micro distilleries, which employees less than 10 workers also grew in number and now make up 730 of all sites.

The boom in the industry has been supported by the freeze in spirit duty by the Chancellor during the budget announcement in October 2021. In addition, the UK Spirits Alliance, a member body for the UK-based spirits producers has urged the tax authority to cancel the new tax proposal, which would lead to more tax per unit for spirits compared to beer, wine, and cider. The member body says the tax authority has not considered modern-day drinking trends and will penalise consumers who enjoy premium beverages.

The pent-up demand from consumers and higher stock keeping of alcoholic beverages by restaurants and pubs has been beneficial for the beverage makers in the last one year.

alcoholic beverage stock to buy

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Let us take a deep dive into the investment prospects of 3 FTSE listed alcoholic beverages’ makers:

Diageo Plc (LON: DGE)

FTSE100 listed company manufactures and sells alcoholic beverages under various brand names. The company’s business delivered good performance after the pandemic, driven by the demand growth.

As a result of good business performance in the last one year, Diageo has announced plans to return up to £4.5 billion to its shareholders by 30 June 2024. The company plans to distribute its profits with shareholders by undertaking a share buyback program. It has already completed few tranches of buyback program. The latest tranche of the buyback program is of value £0.55 billion and will run till 4 March 2022.

Diageo Plc’s last close was at GBX 3,805 on 11 January 2022, with a market cap of £88,509 million.

C&C Group Plc (LON: CCR)

The company manufactures and distributes beer, wine, and spirits in the UK, Ireland, and other European countries.

C&C Group’s business witnessed higher growth driven by positive consumer sentiments and the opening of hospitality venues, which increased profits and cash generation in the third quarter. The company has previously expected operating profit in the range of €50-€55 million for the entire year, which could be affected due to recent restrictions by the authority resulting in the closing down of hospitality venues because of rise in Omicron variant cases.

C&C Group Plc’s last close was at GBX 234.20 on 11 January 2022, with a market cap of £920.15 million.

Distil Plc (LON: DIS)

FTSE AIM listed company market and sells its products under various brand names like Blackwoods Vintage Gin. It sells its products in the UK and the US market.

Distil reported revenue of £1.44 million, while its gross profit was at £794,000 for the six months ended 30 September 2021. The company launched new products in its key operating market and started exporting to Ukraine during the period.

Distil Plc’s last close was at GBX 1.80 on 11 January 2022, with a market cap of £12.32 million.

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