North America delivered strong top and bottom line growth driven by the priority brands. Volume growth of spirits was 3%,wine 6% and beer 7%. Price increases on approximately 50% of the volume together with mix improvements resulted in net sales for spirits, wine and beer all up 8% while ready to drink net sales, from a 6% decline in volume, were down only 1%. Smirnoff vodka and Baileys each delivered double digit net sales growth. Diageo’s value share of the distilled spirits market in the United States grew 0.6 percentage points in the year ended 30 June 2007.

In Europe strong growth in Continental Europe and Russia from Baileys, Johnnie Walker and Smirnoff vodka partially offset the first half net sales decline in Great Britain, Ireland and Spain. In the second half all three of these markets delivered net sales growth: in Great Britain Smirnoff vodka and Baileys both grew net sales over 10%; in Ireland the improved performance of the lager brands drove growth and in Spain Johnnie Walker grew net sales 19%.

International delivered strong growth throughout the region. Diageo’s scotch brands continued to be the main driver of growth, especially Johnnie Walker with net sales up 18% and Buchanan’s with net sales up 40%. The growth of Diageo’s beer brands in Africa accelerated in the second half fuelled by a new Guinness campaign. The launch of Baileys flavours contributed to an increase of 21% in net sales for the Baileys brand. In ready to drink net sales were up 19% led by Smirnoff Storm in South Africa and Smirnoff Ice in Nigeria and Brazil.

In Asia Pacific top line growth accelerated in the second half as marketing spend was increased behind new brand launches in India and in the fast growing markets of Southeast Asia. Johnnie Walker, Diageo’s largest brand in the region, was the biggest growth driver with further strong net sales growth of 22%.While Korea, China and India continue to be the key growth engines for the region, performance was broad based as every market delivered net sales growth. In the second half net sales growth was 17%, driven by Johnnie Walker which grew net sales 32%. Korea, Thailand and India all improved performance in the second half.