Pernod Ricard is better placed than archrival Diageo heading into an economic recovery thanks to its exposure to emerging markets, though Diageo is making the right moves in China.
Diageo, the world's biggest spirits group, said on Monday it might spend at least 624 million pounds to take over China's fourth-largest spirits group Sichuan Shui Jing Fang to add Chinese white spirits to its portfolio of top brands.
The move was likely prompted by concern that just 5 percent of global sales come from fast-growing emerging markets in Asia, compared to about a fifth in the case of Pernod, the world No 2 spirits maker. [...more]
Diageo has launched a scathing attack on Bacardi over the Captain Morgan rum, US Virgin Islands saga. Diageo has accused Bacardi of scheming to protect subsidies at the expense of the economic stability of the US Virgin Islands. Bacardi has insisted the dispute is about the appropriate use of taxpayers' money.
Diageo North America has released the following statement from Guy L. Smith, executive vice president:
"An historic and innovative public-private initiative forged by the US Virgin Islands that would lift the US Virgin Islands' economy out of crisis is under attack by the entrenched corporate interests of a wealthy family seeking to maintain their decades-long grip on rum subsidies.
"Bacardi Limited, which receives tens of millions of dollars a year in annual government rum subsidies, has made a calculated decision to try to drive a competitor out of the United States even though it would be a disaster for the US citizens of the Virgin Islands. And why is Bacardi doing this? They know that because of a quirk in federal law they can protect their huge government subsidies by driving Captain Morgan rum production anywhere rather than the US Virgin Islands. [...more]
Diageo, the world's largest distiller, may take five years to recover sales lost in the recession, as emerging markets fail to fill the void left by US and European drinkers shunning pricier drinks.
The maker of Smirnoff vodka and Johnnie Walker whisky is unlikely to surpass the 145 million cases of liquor it sold in 2008 until the 2013 fiscal year, according to a survey of analysts by Bloomberg. The volume of spirits sold by Diageo probably fell 2.8 percent in the six months to December 31, led by declines in the US and Europe, the survey shows.
Diageo generates more than 70 percent of earnings in North America and Europe, where it has pursued a strategy of so-called premiumisation - which entails convincing consumers to buy more expensive versions of its main brands, such as Johnnie Walker Black Label. As consumer confidence waned in both regions, people drank more at home, rather than in bars, and bought cheaper booze.
Diageo went through an unusually strong phase of growth in the US through the last decade, but a lot of those drivers for spirits will be a bit anaemic," said Alex Oldroyd, an analyst at Barclays Capital. "If they have to rely on emerging markets, it's going to take some time to get back to the earnings growth they were delivering prior to the crisis." [...more]
Diageo has unveiled two new brand extensions for its ultra premium Cîroc vodka. Cîroc Red Berry and Cîroc Coconut are now available across the country and the new extensions will support events like the 'Big Game' in Miami, basketball's All Star weekend in Dallas, Fashion Week in New York and the Oscars in Los Angeles. The product launch party is to feature music from Wyclef Jean.
Sean 'Diddy' Combs, who entered into a strategic marketing alliance with the ultra-premium spirit more than two years ago, said: "I spent a considerable amount of time working with Cîroc liquid specialists to create two bold and unexpected flavours. [...more]
Diageo has launched a new Buchanan's Scotch whisky in Mexico.
Buchanan's Master is a new blended Scotch that sits between Buchanan's 12 year old and Buchanan's 18 year old.
The product is currently being test-marketed in Monterrey, Mexico, and the company hopes to roll it out across Latin America and the Caribbean. [...more]
Diageo is planning to move into the growing world-beer category, starting with a UK push for Windhoek lager.
The company has a 14.6% stake in Namibia Breweries, which owns the brand, and signed a 10-year deal for the global distribution rights last year.
UK managing director Simon Litherland said the move was part of a wider move for Diageo to "participate more broadly" in the beer category outside of key brand Guinness.
"Windhoek lager is the biggest beer brand in Namibia and with the world beer category growing in the UK we think it's a big opportunity for us.
"Diageo has a very interesting beer portfolio across the world, which includes brands such as Tusker, Kilkenny and Senator," he added.
Litherland said that wine and new brand Arniston Bay, which the company has just added to its wine portfolio as part of its Percy Fox business, is another opportunity for the company and he also promised a relaunch of the Piat D'Or range soon. [...more]
The sponsorship will run from the first episode on January 27 until June 2010, across Channel 4 and E4.
Baileys idents will be shown before and after the ad breaks during Desperate Housewives throughout the 23 episode season. As well as the sponsorship of Desperate Housewives, Baileys brand owner Diageo GB is investing £1million on an integrated marketing campaign for Baileys. The campaign will aim to drive awareness of the brand in the lead up to Valentine's Day, Mother's Day and Easter. [...more]
Diageo is anticipating an increase in sales of Talisker, following a Burns Night push.
Burns Night takes place on 25 January and is a celebration of the life of Scottish poet Robert Burns.
In the UK, Diageo is running a Talisker campaign that is to result in 500 Burn's Night celebrations up and down the country. Talisker sales in the UK have increased from 19.7k 9L cases in 2007 to 25k in 2009. [...more]
Diageo has won a landmark case against Vodkat and secured the protection of the vodka category.
Vodkat has been available only at 22% alcohol by volume. Drinks giant Diageo launched the case against Vodkat in order to secure protection for legitimate vodka products and to ensure there was a clear legal position for consumers.
A statement from Diageo said: " 'Vodka' has been found to be a protectable category under the law of passing off and all variants of Vodkat (old design, new design and all line extensions) have been found to be passing off. Intercontinental Brands will no longer be allowed to sell Vodkat or any of its line extensions and the judgement also condemns various other vodka lookalikes (such as Vodkova and Tolstoy of Halewood, and Imperial Volachka of Manchester Drinks Company Limited). We therefore hope we will be able to persuade the manufacturers of these other vodka lookalike products to drop them without too much of a fight." [...more]
Diageo is to test launch Johnnie Walker Double Black whisky in global travel retail.
The launch of the blend marks the 100th anniversary of the introduction of Johnnie Walker and it will be sold alongside Johnnie Walker Black Label from this month.
Johnnie Walker Double Black will be tested at six international airports - Bangkok, Dubai, Lebanon, New York (JFK), Singapore and Sydney. The five-month test period runs to the end of June 2010, with six select retail partners: Beirut Duty Free, Dubai Duty Free, DFS Singapore, International-Shoppes Duty Free, King Power International and Nuance. The launch is supported in stores by extensive high-impact visibility, sampling and hostess support. [...more]
The RRP of a pint of Guinness will rise by 10p to £3.03 on 1 February, producer Diageo has announced.
In further grim tidings for drinkers, brewer AB InBev - which counts Beck's, Budweiser, Staropramen and Stella Artois on its roster of brews - "will increase the wholesale price of all its drinks products by an average of 4p a pint" on the same date.
Stuart MacFarlane, president of AB InBev UK, told The Publican: "In keeping with standard industry practice we review our pricing at the start of each year. [...more]
The core business we have is in our imported brands (Johnnie Walker) and Smirnoff and Vat 69 bottled locally. This would be our priority and investment focus here. And this is where we see the biggest growth potential," Diageo Asia Pacific president Gilbert Ghostine said in a conference call with analysts.
He said to scale up volumes in the domestic market the company will focus on the premium products and later on mass brands. "In India, we continue to believe that the long-term prospects for Scotch are extremely attractive, and that a 'top-down' strategy, leading with our reserve brands and Johnnie Walker, is the right one," he pointed out. [...more]
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