Belfast Telegraph

Drinks giant upbeat despite economic trouble brewing

Diageo’s NI chief Michael McCann on the recession, popular brands, customer care and NI tourism

Diageo NI chief Michael McCann says there has been an increase in people deciding to drink at home

How long has Diageo been operating in Northern Ireland?

Diageo operated under the Guinness name before the merger with Grand Met in 1997 to become Diageo.

We directly employ more than 400 people at four sites in Northern Ireland.

Do you have any plans for expansion?

We are in a strong position to support both the marketplace and the economy with the acquisition of Bushmills Distillery and the investment in our world-class facility at Mallusk.

We will continue to invest in our brands and services for customers to ensure that they are well placed to meet the challenges they are facing.

How has the downturn affected Diageo on-sales and off-sales? Does it fear worse to come thanks to public sector cuts?

We are seeing a reduction in pub visits and an increase in home consumption.

The challenge for us is to continue to make the pub relevant in a recession. We know people still want to go out and enjoy themselves, and where better than the pub as the place to do that.

How will the economic troubles and austerity measures south of the border affect Diageo in the Republic and Ireland-wide?

Our leadership team in Ireland is actively engaging with key businesses and government stakeholders to reinforce the importance of maintaining the 12.5% corporation tax rate for Ireland and avoiding any increase in excise rates, which clearly will have an affect on the alcohol industry, cross-border alcohol purchases and a negative impact on jobs, investment and growth within Ireland.

Our customers in the licensed trade will face economic and commercial pressures and we are committed to supporting them in these difficult times.

Have you launched any new initiatives to combat the current challenges?

Yes, innovation is absolutely vital for both the on-trade and the off -trade and it is at the heart of our business.

We know from research and experience that it is crucial to continue to provide our customers with new product formats and to back that with the training required to ensure that they are properly dispensed.

We are constantly looking at new ideas and new ways of doing things; one of our greatest accomplishments in recent years is the hugely successful launch of Harp Ice Cold.

Harp is a brand with a strong local heritage and by using groundbreaking technology we have created a new and innovative Ice Cold variant that has proven extremely popular.

We also recently launched Guinness Black Lager, Carlsberg Extra Cold and Smirnoff Flavours which are gaining traction in both the on and off-trades.

It is a competitive marketplace. How do you win business?

The industry is very vibrant and competitive in Northern Ireland but we are well positioned with our portfolio of world-leading global brands — including Bushmills, Baileys, Guinness, Harp Ice Cold, Smirnoff, Captain Morgan and Gordons Gin; our commitment to innovation with investment both above and below the line; and a further commitment to partner with our customers to support their business.

What’s Diageo’s take on minimum alcohol pricing? Should alcohol be sold at a reduced VAT rate in pubs and at the same price as supermarkets to combat on-street drinking?

Minimum pricing is not the answer to tackling problems with alcohol misuse as the experience of other countries has clearly demonstrated.

By its very nature minimum pricing will have an impact on all consumers, the majority of whom enjoy alcohol responsibly without harm to themselves or others.

Over a third of alcohol is consumed by less than a tenth of the population, which clearly suggests that targeted interventions would be much more effective and appropriate.

Christmas is the busiest time of the year for the pub trade. What support beyond supplying brands does Diageo provide for its customers?

At Christmas, and indeed right throughout the year, we have a comprehensive plan of brand campaigns and business support for our customers. This support sees our sales and commercial teams work closely with publicans and the off-trade to grow their business, to keep them relevant to consumers and help deliver a great pub experience.

How does Diageo see the hospitality industry performing in 2010 and beyond? What will be the main area of growth?

Northern Ireland boasts a thriving tourist experience. With Derry having been awarded the Capital of Culture 2013 title, Northern Ireland is fast becoming one of Europe's most captivating destinations.

The hospitality industry has great potential for business growth and has a key role to play in driving the the tourism industry as a thriving part of a sustainable Northern Ireland economy.

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