Comment - Diageo and an Over-Excited Press Corp
Walsh admitted dialogue is continuing with the owners of Jose Cuervo
In his time as CEO of Diageo - if not before - Paul Walsh will have probably learnt a lot about the fourth estate.
In a press conference today, Diageo's top man came out with the old adage: "Don't believe everthing you read in the press".
He was not directly referring to the Jose Cuervo situation, but the principle applies. A Sunday Times report suggesting Walsh would announce Diageo's acquisition of the Tequila brand today did not materialise. But, judging by the noises Walsh was making, it is still probably a case of when, not if, Diageo gets its hands on the coveted Cuervo.
"We would love to deepen our relationship with the brand and with the (Beckmann) family," Walsh told the assembled press pack, following full-year results announced today. But he added: "It takes both parties to want to do that at the right set of economics, that work for our shareholders and the family."
He concluded: "As a distributor we have regular dialogue with the Beckmanns and we'll see where it goes. I can't say anymore than that."
Later, however, Walsh revealed just a hint of frustration over a possible obstacle the group faces, namely the owners. Asked whether he would set a deadline on whether Diageo renews its distribution deal for Jose Cuervo, he said: "It's pointless me setting a deadline because I can't influence it. It is Senor Beckmann who owns the brand and therefore it is his will that determines where it goes."
Walsh played a similarly straight bat on the UB Group situation in India. Although, he noticeably did not refer to Vijay Mallya's company by name, he said: "We have dialogue, but don't always assume that leads to M&A activity," Walsh said. Pushed by just-drinks on whether, he was having "dialogue" with UB Group over a possible tie-up in the country, he fired back: "There's dialogue with everybody in the industry!"
Away from M&A speculation, the Diageo boss was also asked his thoughts on the emerging craft spirits scene. "You see brands popping up that are quite interesting and we have a good lens on what is going on out there," he admitted.
But, he said there was also a lot of "churn", where small brands get launched, but don't survive. Overall, Walsh was positive on the trend. "It's good, it creates interest, it creates mystery and creates further premiumisation opportunities. We like it and it will continue."
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