September 1, 2009
just-drinks.com editor's weekly highlights
U.S. Drinks Conference 2009, Tues./Wed., Oct. 13 and 14 at the Helmsley Park Hotel, New York.
Last week has helped to put a little more clarity and context around Diageo's decision to reorganise in Scotland.
Scotch whisky was one of Diageo's drinks categories worst affected by the economic slump, with like-for-like net sales of Johnnie Walker down 6% (volumes fell 11%) and J&B down 12% for the year to the end of June.
At the same time, the drinks giant's pre-tax profits slipped to GBP2bn, from GBP2.1bn a year earlier - although the firm's detractors pointed out that profits of GB2bn does not necessarily dictate that job cuts are necessary.
Then, in an exclusive interview with just-drinks, Diageo CEO Paul Walsh said he expected "eyes will be rolled" at any alternative restructuring plan put to the group. Current alternatives on the table, just-drinks understands, involve the use of public money to prevent Diageo exiting Kilmarnock, but Walsh has said unequivocally that the company does not want handouts.
Despite ratcheting up the pressure, it would be a surprise if the opposition 'Taskforce' persuaded Diageo to back down on this one. More likely, and this is speculation, the plans will go ahead and there will be some kind of Diageo offering to Kilmarnock - a Johnnie Walker museum, for example.
In other Diageo news, the group has ended its talks with United Spirits in India and has warned that FY2010 is going to remain tough.
Elsewhere, Australian Vintage has led fresh calls for a cull in Australia's wine industry, following tough wine results from it and Foster's Group.
In the UK, C&C Group has signed a deal with A-B InBev to take over the Tennent's lager brand, as well as A-B InBev operations in Scotland, Republic of Ireland and Northern Ireland.
A few days earlier, Heineken said it would continue to place cost savings above acquisitions after posting a 20% rise in half-year profits.
Did someone say August is supposed to be quiet?
Until next time...
Olly Wehring, Managing Editor
Selected research from just-drinks has a 10% discount, choose from a number of reports all containing detailed analysis and forecast data.
Yesterday (27 August), Diageo reported its full-year results. Although the company managed to hit its full-year guidance, the group's warning that this year will be tough suggests that Diageo has its work cut out in fiscal 2010. Speaking exclusively to just-drinks yesterday afternoon, group CEO Paul Walsh talks about the trials and tribulations of the past 12 months – including, of course, the ongoing row in Scotland.
With the drinks industry not always getting a good press, it really needs to make its case before governments and international organisations. As a result, effective lobbying is crucial for the drinks industry on the national and international political scale. Here just-drinks takes a look at how the drinks industry goes about its lobbying business and focuses on who takes its message to political power brokers around the world. It’s a tough job, but the rewards of an effective lobbying strategy can pay dividends many times over in terms of legislation that does not punish the sector and government policy that is realistic as well as effective.
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