GLOBAL: Diageo targets savings with supply chain restructure

By | 11 March 2013

Diageo said the move is due to its greater presence in emerging markets

Diageo said the move is due to its greater presence in emerging markets

Diageo has announced a review of its global supply operations aimed at annual cost savings of GBP60m (US$89.4m). 

The group's regional structures will be cut back and responsibility for its local operations will be transferred down to its 21 "key" global regions, it said today (11 March). The savings are due to kick-in from 2016, a company spokesperson told just-drinks. Costs associated with the “restructuring” will be around GBP100m.

Diageo said the move is a consequence of its “increasing presence in new faster growth markets”. 

The spokesperson added: "A number of the businesses we have acquired have local supply chains, which it makes more sense to manage locally... these changes will give local general managers more accountability and end to end control of their businesses.” 

Asked whether the move would result in job losses, the spokesperson told just-drinks: "It is too soon to say, but there is likely to be some impact, as regional structures are reduced.”

Supply of Diageo's Scotch whisky brands, however, will continue to be handled on a global basis. A global supply group will also be retained by the company to oversee operational standards.  

The move follows a similar shake-up of its global marketing and sales operations in 2011. The latest change will bring the supply operations into line with this structure. 

“Further work will be required to establish the exact nature of the reorganisation to be made,” Diageo said in a statement. 

But, it added: "An initial review has already established that efficiency-driven cost savings can be delivered, which, together with savings from footprint changes and cost reductions in respect of the regional supply organisations, are expected to amount to approximately GBP60m per annum."

Expert analysis

The IWSR Forecast Global Summary 2012 - 2017

The IWSR Forecast Report 2012-2017 - Global Summary, extracted from the full IWSR Forecast Report 2012-2017, analyses current and future trends for all wine and spirits categories, RTDs and beer.

Sectors: Beer & cider, Emerging markets – BRIC, Spirits, Wine

Companies: Diageo

View next/previous articles

Currently reading -

GLOBAL: Diageo targets savings with supply chain restructure

There are currently no comments on this article

Be the first to comment on this article

Related research

Diageo Plc in Spirits (World)

Since the great recession of 2008/2009 Diageo has transformed itself, primarily through acquisition, from being overly focused on mature markets to a more balanced geographic split and if, as seems likely it gains control of UB Group’s United Spirits...

Related articles

just the Round-Up - The week in drinks

The top ten stories published on just-drinks this week:

Comment - Beer - Mixing It Up

Marketing a beer brand successfully has traditionally involved partnering with a big event and parting with big bags of cash. But, Larry Nelson has been introduced to a smaller, smarter way to push a beer.

TRAVEL RETAIL: Diageo launches Johnnie Walker city skylines bottles

Diageo has unveiled a limited-edition travel retail range of designs for its Johnnie Walker brand featuring skylines of famous cities.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page