Standard & Poor has cut Diageo's long-term corporate credit and senior unsecured debt ratings one notch to A from A+.

The move, S&P said, was due to a lack of improvement in Diageo's financial profile.

"The downgrade reflects Standard & Poor's expectations that Diageo will not restore its financial profile to a level commensurate with an A+ rating by December 31, 2003, nor achieve that level thereafter," said Standard & Poor's credit analyst Vincent Allilaire in a statement.

However, S&P said, Diageo could improve its financial profile through its strong cash flow generation, the possible reduction of its largely discretionary share buy-back program, as well as through the sale of its stake in General Mills.