NAIROBI (Reuters) – East African Breweries (EABL), the Kenyan subsidiary of Diageo Plc, on Friday rejected a media report that its parent company was planning to sell the Tusker beer brand as part of extensive cost-cutting measures.

The US news portal Axios reported last month that Diageo wanted to sell other beer brands in addition to Tusker, such as the Irish brands Smithwick’s, Kilkenny and Harp Lager, as they were squeezing the margins of the rest of the company.

But in an interview with Reuters, EABL chief executive Jane Karuku denied that the brand would be sold. “This is market speculation,” she said, declining to comment further.

Diageo did not initially comment on the other brands being considered for sale.

EABL, the market leader in Kenya with whisky brands such as Johnnie Walker, reported an increase in net sales in the first half of the year to the end of December.

But higher production and financing costs squeezed the company’s margins after the Kenyan shilling, the currency of its largest market, weakened and interest rates rose.

EABL will focus on improving margins in the second half of the year to cushion the company’s performance, Karuku said.

(Reporting by Duncan Miriri; Editing by Jan Harvey)