Every day, everywhere

This has been a most encouraging year for Diageo, our shareholders, our employees and for all those whose lives are touched by our business. Our very strong financial results and the performance that delivered them are detailed elsewhere in this Annual Review. Yet it is appropriate for me to observe that the business climate in which that performance has been delivered is becoming increasingly complex and frequently much more testing.

Diageo trades in more than 180 markets and in almost every one, the dynamic of the debate on alcohol in society is different. We welcome it and we respect the differing views it provokes. We do all we can to contribute by advocating and demonstrating the case for alcohol and consumer responsibility.

That commitment to responsible use of alcohol extends much further than simply debating the case for effective and equitable regulation. We are also actively involved in a myriad of programmes and initiatives designed to promote responsible drinking.

In North America these include our support for the widely admired activities of The Century Council. We have also supported legislation for automatic licence revocation. These measures – which automatically confiscate the driving licence of adults who buy alcohol for people under 21 – have been passed in eight states and are an effective deterrent to underage drinking. Across the world the Johnnie Walker sponsorship of Team Vodafone McLaren Mercedes in Grand Prix motor racing goes from strength to strength, with a major commitment to responsible drinking at its heart. For the ICC Cricket World Cup, held in the Caribbean, the Johnnie Walker ‘Know Your Boundaries’ programme promoted the cause of responsible drinking. It also offered the prospect of major community support for outstanding achievement. When South Africa’s Herschelle Gibbs became the first batsman to hit six sixes in an over during an international match, this triggered a $1 million donation from Diageo to Habitat for Humanity.

Many corporations, big and small, can point to very significant community programmes. Few, however, can match Diageo in the way that those programmes are central to the marketing of our products, to the way we do business and to the sustained commitment of our employees, customers and distributors to ensure that our business is conducted responsibly.

Guinness and our range of beers – including Harp, Tusker and Windhoek – are central to our business in Africa. These products are deeply rooted in the communities where our consumers live, work and celebrate. As many of these are places facing water shortages, Diageo has established a goal of bringing clean drinking water to a million people.

Our commitment extends to every aspect of the way we do business. It is reflected in our determination to meet the highest standards of probity and transparency. It is our intention to build a business that is enduring. A business that consistently produces excellent results and a business that consistently does the right thing.

It is 10 years since Diageo was created. In that time our board has developed in strength and diversity. Today it brings together business leaders with a truly global pedigree. We shall see the latest stage in that evolution when on 1 July 2008 I hand the chair of Diageo to Dr Franz Humer. Franz has an exceptional record in the leadership of global businesses, including Glaxo Holdings and Roche.

Before that I look forward to a further year of Diageo reaching new success and achievements. That will be accomplished with the continued support of our outstanding employees and our highly successful relationships with suppliers, customers and distributors. To all of them I offer my grateful thanks for our success in the year covered by this review. And to you, our shareholders, I extend those thanks for your continued support of our endeavours.

Lord Blyth of Rowington
Chairman