“Together we celebrate life responsibly.” Thus Diageo greets its customers.
Yet in Europe, it seems that consumers have not been rejoicing enough, with the company’s underlying takings in the region falling by 1 per cent in the last half of 2004.
Or maybe Europeans are being too responsible, with sales of alcopops - once the causes célèbre of younger drinkers and thus the bêtes noires of a blend of campaign groups - plunging by some 20 per cent.
Or maybe they have forgotten just what great company Diageo is. Beneath the cocktail of excuses given for lapses in performance – ranging from smoking bans in Italy and Ireland to the cancellation of the ice hockey season in North America – lies a common mixer. The marketing budget. Where it has risen, as in North America and Asia, so have Diageo’s sales. Where it has declined, as in Europe, sales have fallen.
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Indeed, marketing support for alcopops plunged by 49 per cent. Diageo may term brands such as Smirnoff Ice as “ready to drink”. But where are the Britons ready to drink them?
Last year’s lesson, that companies attacking consumer markets require the support of poster, magazine and airtime assaults, has clearly not been learned by Diageo. The company has failed to recognise what distinguished mustard-hot Reckitt Benckiser from limp-locked Unilever, and kept Scottish & Newcastle fizzing while rivals succumbed to the cold European summer.
Or maybe Diageo has twigged. Perhaps the decline in European spending reflected a realisation that regional gains would come at a heavy cost at a time of “tough” trading conditions.
What was surprising about the tone of the statement, and comments afterwards by Nick Rose, the Diageo finance director, was an acceptance of a “difficult and challenging” market. Rather than talking of advertising assaults, beside isolated campaigns behind the likes of Guinness and Gordon’s Gin, Mr Walsh highlighted European cost cuts and a quest to “reallocated resources” across the region with “inevitable” job losses.
Not that all European countries would be affected, of course. Only those in the west of the continent. “Markets like Poland are in a very different category to Europe’s more mature markets and Russia has some great opportunities,” Mr Rose said.
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Having seen unglamorous work shift abroad because it cannot compete on cost, Europe is losing one of its more glitzy trades because it, apparently, cannot stand a round. And this at a time, bizarrely, when Britain is in the temperance throes of a debate about teenaged drunkenness.
Which is the kind of publicity, of course, which Diageo does not need and would explain, conspiracy theorists might say, its recent reluctance to push the alcopops beloved of younger drinkers.
Whatever, it is clear that Diageo has met, in mature Europe, a regulatory, legislative match to its expansion hopes. It is the immature to which it is now turning its investment and products. Responsibly, of course.