If you wanted to be a pub bore, there could be worse topics to choose than the Diageo (LSE: DGE) share price. The brewer and distiller is massively profitable and has a fantastic collection of brands, from Guinness to Johnnie Walker. Yet Diageo shares have more than halved in just five years.

That is bad enough. But 2026 was supposed to be a year of change, with a new boss at the helm.

So far, the most notable change is a cut to the dividend.

Until a couple of years ago, Diageo had been growing its payout per share annually for decades, so that is a bitter pill for shareholders to swallow.

What does the new boss have to show for his efforts so far?

Diageo shares have fallen 10% already this year. That is a much worse performance that the 4% gain in the FTSE 100 index (of which it is a constituent) over the same period.

As a Diageo shareholder, should I just throw in the towel and cut my losses?

Trying to discern long-term trends and short-term blips

I am tempted.

The dividend cut – especially on such a big scale – sits badly with me as a shareholder. After all, the company continues to be highly cash generative.

There are a few big questions that need answering when assessing the Diageo investment case, I reckon.

One is whether the current trend of younger consumers drinking less alcohol is here to stay.

Could this be like cigarettes, where demand enters long-term structural decline?

Or is it more like fossil fuels, where demand may be inconsistent but repeated claims that we have passed “peak oil“ later turn out to be unfounded (so far)?

The second question is about the long-term sustainability of premium and ultra-premium pricing for alcoholic spirits.

Diageo has plenty of workaday brands at competitive price levels, such as Smirnoff. But the past decade or two have seen it benefit from selling high-margin versions of some of its iconic tipples.

Along with other spirits producers, Diageo has been suffering from a drop in demand for super-premium tipples. Time will tell whether this is a permanent shift in consumer preferences.

Lots to like, but an unclear direction of travel

My concern about the company’s current chief executive is partly that he has not previously worked for Diageo, a complex organisation.

His background as a former Tesco boss does not give him the drinks industry or luxury industry experience I think would be helpful in answering the two questions posed above – especially the second one.

Time will tell whether that is a negative (which I fear), or a positive that allows fresh thinking at the firm. So far though the fresh thinking on show – slashing the dividend – is not to my taste.

I still think Diageo has great assets, deep business understanding, and a world-class distribution system. If it can make those work to its advantage, Diageo shares may merit a much higher valuation than they currently command.

But a lot of uncertainties remain. I will hang onto my Diageo shares for now, but will not be buying more even at the current depressed price.