Diageo is poised to cut back its presence in Germany, according to local reports. The drinks giant is considering relocating the bulk of its German operations to either Budapest or Hungary, the Lebensmittel Zeitung said yesterday (31 March).

Diageo's offices in Rüdesheim in the country currently house 157 employees. Following the shake-up, the offices will only be responsible for distribution, the paper said.

The move is in light of weak spirits sales in Europe and the crash of FAB's (flavoured alcoholic beverages) in Germany following the introduction of a spirits surcharge last year, the paper note. Diageo's head of Europe, Andrew Morgan, is organising the restructure, the German paper added.

Lebensmittel Zeitung reported that all the administrative activities such as IT, finances, procurement and customer services are to be relocated from Rüdesheim to Budapest, whilst the personnel department and marketing will move to Paris. Only the sales and marketing departments will be left in Rüdesheim.