Businessweek

Diageo plc engages in the manufacture and distribution of premium drinks. The company produces, markets, and distributes a range of premium brands, including Johnnie Walker, Smirnoff, Baileys, Crown Royal, Captain Morgan and Guinness. In addition, it also owns the distribution rights for the Jose Cuervo tequila brands in North America and other markets. Products and Markets North America The company sells and markets its products through four operating units: US Spirits & Wines, Diageo-Guinness USA, Diageo Chateau & Estate Wines and Diageo Canada. As of June 30, 2012, the North America market included the North American operations of Global Travel. The United States Spirits & Wines business executes sales and marketing activities through seven divisions. The company trades through a three-tier distribution system, where the product is initially sold to distributors, who then sell it to on and off trade retailers. It sells its spirits products to state liquor control boards through the bailment warehousing system, and from there to state or agency liquor stores. Diageo-Guinness USA markets the company’s U.S. beer brands nationally, as well as the progressive adult beverages. Diageo Chateau & Estate Wines (DC&E) owns, leases, and operates wineries in California. In the U.S., the majority of the wine is sold through the Spirits & Wines divisions with the remainder sold through the winery visitors centres and club sales. The Canada business unit distributes the company’s collection of spirits, beer and wine brands across all Canadian territories. Europe The Europe market comprises western Europe, Russia and eastern Europe, Turkey and the European operations of Global Travel. Western Europe comprises the Great Britain, Ireland, Iberia, Italy, Switzerland, Germany, Austria, Benelux, Nordics, France, Greece, the western European reserve brands, Diageo Guinness Continental Europe and European wines. In Great Britain, the company sells and markets its products via three business units: Diageo GB (spirits, beer and ready to drink), Percy Fox & Co (wines) and Justerini & Brooks Retail (private client wines). Products are distributed both through independent wholesalers and directly to the major grocers, convenience and specialist stores. In the on trade, products are sold through the major brewers, multiple retail groups and smaller regional independent brewers and wholesalers. Ireland comprises the Republic of Ireland and northern Ireland. In both territories, the company sells and distributes directly to both the on trade and the off trade (for example, retail shops and wholesalers) through a telesales operation, extensive sales calls to outlets and third party logistics providers. Across the remainder of western Europe, the company distributes its spirits brands primarily through its own distribution companies. In France, the company sells its spirits and wine products through a joint arrangement with Moët Hennessy, and its beer products through Brasseries Kronenbourg (part of the Carlsberg group). In the Nordic countries, the company has sales offices in Sweden, Norway and Denmark, and representation through third party distributors in Finland and Iceland. Smirnoff Ice is sold in Nordic countries through Carlsberg. A specialist unit, Diageo Guinness Continental Europe, has been established for the distribution of the company’s beer brands in mainland Europe in order to achieve synergies in the marketing and distribution of the Guinness and Kilkenny brands. The distribution of these brands is managed by this specialist unit with particular focus on Germany, Russia and France. Russia and Eastern Europe comprises Russia, Poland and 32 distributor serviced countries in Europe. In Russia and Poland, the company operates through wholly owned subsidiaries. Throughout the whole of the former Soviet Union and eastern block (excluding Russia and Poland) plus Iceland, Finland, Malta, Cyprus and Israel, the company sells and markets its brands via local distributors. In Hungary, the company sells its brands through its associate company Zwack. In Turkey, the company sells its products via the distr