Dollars, Drug Use, Obesity, and the Future of Wine

The investors will lead the way in telling us what's next for alcohol and wine

Fund managers get a bad rap these days. They are among the primary enablers of millionaires and billionaires—the folks responsible for all the bad in the world. However, it’s worth noting that these guys have one job and one job only: taking stock of the world so that their investments and the investments of their clients grow larger over time.

So what does it mean that one of the pre-eminent investment fund managers on the planet sold off nearly $400,000,000 in stock of Diageo, the largest spirits producer in the world, on fears that Ozempic and other anti-obesity/weight-loss drugs will harm the alcohol industry?

Terry Smith manages the $3 Billion Smithfund and has been dubbed the “English Warren Buffet” for his strategy of buying good companies and holding them for a long time. The SmithFund had held that investment in Diageo he recently sold for 15 years. In a note to clients, Smith wrote:

“We expect the entire drinks sector is in the early stages of being impacted negatively by weight loss drugs. Indeed, it seems likely that the drugs will eventually be used to treat alcoholism such is their effect on consumption.”

This move highlights some very important implications for the alcohol industry