Doing Business In Turkey

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Diageo plc,
Lakeside Drive,
Park Royal,
London,
NW10 7HQ

Tel +44 (0)20 8978 6000,
www.diageo.com

For more information please contact:
investor.relations@diageo.com or
media.comms@diageo.com

Overview

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Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, J&B, Windsor, Buchanan's and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Baileys, Captain Morgan, Jose Cuervo, Tanqueray and Guinness.

Many of the brands have been around for generations, while some have been developed more recently to meet new consumer tastes and experiences. The great range of brands and geographic spread means that people can celebrate with Diageo products at every occasion no matter where they are in the world. This is why 'celebrating life every day, everywhere' is at the core as business motto.

History

Diageo is still a relatively young company - it has only existed in our current form since 1997- but Diageo brands and business have a rich heritage.

For example Diageo's earliest ancestor company formed in 1749, is Justerini & Brooks - wine merchants, and blenders of the famous J&B whisky range. 10 years after that, in 1759 Arthur Guinness signed the lease on the now world famous St James's Gate brewery in Dublin, going on to create a globally iconic brand.

Diageo Bottle Brands Row

Many of Diageo distilleries were also fired-up in the late eighteenth century. Through the nineteenth and twentieth centuries the range of brands and  business continued to innovate and expand under various parent companies, and in 1997 Diageo was created through the merger of Grand Metropolitan Public Limited Company and Guinness PLC, creating a food and drinks conglomerate which included the world's greatest collection of premium drinks.

Between 2000 and 2002 Diageo made the strategic decision to exit their food interests - with Burger King and Pillsbury being the two main divestments - and to focus exclusively on premium beverage alcohol. It was during this period, in 2001, that Diageo acquired additional spirits and wine brands from Seagram, and has subsequently expanded the range through selective long term value acquisitions, strategic partnerships and innovation.

Strategy

Diageo Vertical brand strip

At Diageo, the business strategy is to deliver sustainable organic growth through the stewardship of our outstanding range of premium drink brands. This is supported by strong financial discipline and cash management, and where appropriate will be supplemented by selective acquisitions.

Diageo manages its business in terms of global priority brands, local priority brands and category brands; however the main focus for organic growth is global priority brands which contributed 57% of total volume (81.9 million equivalent units) in the year ended 30 June 2010. They are: Johnnie Walker, Smirnoff, Baileys, Captain Morgan, José Cuervo, J&B, Tanqueray and Guinness. This collection of outstanding brands offers both diversity and strength and high quality brand experiences to consumers.

Over the years, Diageo has built a great mix of strengths and resources through which it manages to target growth in both the good times and more challenging times. This range of capabilities enables Diageo to be agile in response to global and local market conditions, and supports the scale and diversity, which in turn provides the company with resilience and growth opportunities.

Diageo understands that its leadership as a company is benchmarked by more than just financial success. How Diageo treats people, the culture Diageo promotes internally, how Diageo lives its values, and the way in which Diageo positively impacts those communities where Diageo operates are also important measures. Diageo seeks to be at the forefront of industry efforts to promote responsible drinking and work with other stakeholders to combat alcohol misuse. The company's approach is based on three principles: combating alcohol misuse; setting world-class standards for responsible marketing and innovation; and promoting a shared understanding of what responsible drinking means in order to reduce alcohol-related harm.

A core theme is the passion towards consumers and customers. It should come as no surprise then that Diageo continually seeks to understand what the consumers and shoppers want. This insight informs its customer relationships and helps people celebrate with Diageo brands every day, everywhere.

Diageo brands have broad consumer appeal across geographies and look to reach an ever-increasing number of consumers by focusing on effective and efficient routes to market. Diageo uses world-class marketing capabilities to combine the benefits of global scale with local insight, and acts with flair and agility to delight consumers with both the trusted brand favourites and the introduction of new and exciting innovations.

Turkey Market

In August 2011, having received the necessary regulatory clearances, Diageo completed the acquisition of Mey Içki, the leading spirits producer and distributor in Turkey. Mey Içki  has a leading position in the Turkish spirits market with a wide range of products from raki, including Yeni Raki, to vodka, wines and liqueurs. These brands will complement Diageo's international brand range and enable Diageo to further access the emerging middle class in Turkey. This acquisition therefore gives Diageo a strategically important presence in a dynamic and vibrant market with strong potential for the future.

This investment is in line with Diageo's overall growth strategy. Diageo seeks sustainable growth - whether by geography, category or brand - and a strategic fit with our existing range of international spirits.

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