Diageo to realign supply chain operations with focus on emerging markets
Diageo, the maker of Johnnie Walker whiskey and Smirnoff vodka, is to restructure its global supply and procurement operations by reducing the role of five regional structures and giving more control to local managers in its 21 key emerging markets.
The move, which is a result of the company's increasing growth in new emerging markets, will help Diageo achieve cost savings of around £60m per annum starting from 2016 and incur around £100m as restructuring charges.
Diageo sales from emerging markets grew 14% year-on-year in the first half of 2012-13, as against sales growth of 5% from the overall group.
The drinks giant, which aims to increase its sales from emerging markets to 50% of the total sales by February 2016, has already reported 43% growth.
Earlier on 9 November 2012, the company had made changes in the reporting for geographic segments. This will allow Diageo to report its year ending 30 June 2013 results using new geographical areas like North America, Western Europe, Africa, Eastern Europe and Turkey, Latin America and Caribbean and Asia Pacific.