Diageo Accused LVMH Of Failing To Pay 181 Million Euros In Dividends
The world's largest alcohol producer, British Diageo, has initiated arbitration proceedings with French luxury goods manufacturer LVMH Moet Hennessy Louis Vuitton SA in connection with the non-payment of dividends of 181 million euros in 2019.
Diageo owns 34% in a joint venture with LVMH for the production of alcoholic beverages Moet Hennessy.
In the report for the financial year that ended on June 30, Diageo noted that the non-payment of dividends is a violation of the partnership agreement with the French company.
As an informed source tells the Financial Times, Moet Hennessy initially intended to pay dividends for 2019 but changed its decision due to the impact of the pandemic on the company's business. This decision was approved by LVMH, which is the majority shareholder of Moet Hennessy.
LVMH in June announced a reduction in its final 2019 dividend to 2.6 euros from 4 euros per share a year earlier. Last year, the company received a record revenue of 53.7 billion euros.