The year recorded in these pages is one of considerable achievement
for Diageo. As the Chief executive’s review explains, the business has
delivered another strong performance.
It has done so in increasingly testing circumstances. Last year’s Annual
Report drew attention to the growing challenges faced by truly global
businesses. Appropriately, companies which do business in the world’s
marketplaces now have to do so with the highest possible standards
of governance. In practice that means much greater scrutiny – by
regulators and commentators – of our financial dealings and closer
examination of our relationships with suppliers, customers and business
partners. We welcome the application of those standards – as should our
shareholders – for the degree of assurance it offers. But we should also
recognise that scrutiny brings with it significant new responsibilities for
our management and additional costs to the business itself.
For a company in the beverage alcohol business there is an extra
dimension. In several markets the role of alcohol in society is at the heart
of important public debates. From the outset we have chosen to be
active participants in those debates, as we believe that alcohol should
play a responsible role in society, and it is right for beverage alcohol
to be appropriately regulated and taxed. We also respect the rights
of those who choose not to enjoy alcohol.
This is the first opportunity I have had as chairman to contribute to
Diageo’s Annual Report. I do so reviewing a year throughout which my
distinguished predecessor, Lord Blyth, was chairman. Lord Blyth chaired
the board for eight years – throughout Diageo’s transformation into the
world’s leading premium drinks business. That period included the sale
of Pillsbury and Burger King, the acquisition of a substantial part of the
Seagram spirits and wine business, Bushmills, Chalone Wine Group and –
most recently – our stake in the 50:50 company for Ketel One vodka. He
created a most effective partnership with our chief executive, Paul Walsh.
He also oversaw the transformation of the board into one of truly
international character, and was a highly regarded representative of the
business to governments, business partners and shareholders. On behalf
of everyone associated with Diageo, I thank Lord Blyth for his remarkable
work and wish him very well in all he does in the future.
Dr Franz B Humer,
Chairman