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GLOBAL: Diageo rolls out review to entire operating model

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Diageo has extended the review of its European operations to encompass its entire operating model, in an attempt to creating “a more cost-effective organisation”.

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The UK-based drinks giant, which said yesterday (24 May) that it is reviewing its operations in Europe, announced this morning that it has initiated a broader review across its operations “to ensure that all our resources are deployed closer to the market and in those areas where the potential for growth is greatest”.

Subsequently, Diageo said that, on 1 July, it will break up its International region into Diageo Latin America and Caribbean and Diageo Africa. As part of the move, the president of the International unit, Stuart Fletcher, will leave Diageo.

The company created the International region, made up of three regional hubs of Latin America and the Caribbean, Africa, and Global Travel and Middle East (GTME), back in 2004. The GTME hub will report in to Diageo Asia Pacific. Jane Ewing, the MD of GTME, will report to region president Gilbert Ghostine.

“The rationale is that the Asian traveller has emerged as having crucial significance to the future growth of that business,” a spokesperson for Diageo told just-drinks.

Also, the firm's central sales and commercial organisations will be moved within its in-market companies. As a result, chief customer officer Ron Anderson has also decided to stand down.

Both Fletcher and Anderson will remain with Diageo until the transition process has been completed which is likely to be by the end of this year.

“Over the next few months we will consult with our employees on further changes to our operating model and I expect to make an announcement at our preliminaries presentation in August as to the full extent of these changes,” said CEO Paul Walsh. “The main driver of these changes will be to focus on growth and create a more cost-effective organisation.”


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