Diageo, the UK food and beverage company, reported profits up 2.8% for the fiscal year today, falling just below industry estimations. Pre-tax profits came to £1.82 billion before goodwill, amortization and exceptional items, up from £1.77 billion from last year.The company said that sales for the year, which ended 30 June 2000, rose 0.9% to £11.9 billion from £11.8 billion. Meanwhile, earnings per share before items were up 9% to 37.3 pence.The results seem to vindicate the company's decision to leave the food business and focus on its drinks interests. While the company's drinks business recorded a 6% sales growth and a 15% operating profit growth, the food divisions Pillsbury and Burger King suffered from stifling competition and falling franchise sales, respectively.Diageo has agreed to sell its Pillsbury division to US food concern General Mills for around $10.5 billion. Burger King, on the other hand, is to be offloaded via a partial float to avoid the $1.5 billion capital gains tax it would have faced had it sold the business off directly.Drinks, meanwhile, continued to see the lion's share of the marketing budget, most of which was focused on the company's core spirits brands. Investment in marketing increased 7% to £679 million.Paul Walsh, the company's new CEO, said in an interview this morning: "The performance of UDV and Guinness gives us a strong platform for growth for the future, while across the whole group the new year has started well."