relative valuation of diageo public limited company

RELATIVE VALUATION OF

DIAGEO PUBLIC LIMITED COMPANY

CLARKE BALDWIN

A THEMATIC PAPER SUBMITTED IN PARTIAL

FULFILLMENT OF THE REQUIREMENTS FOR

THE DEGREE OF MASTER OF MANAGEMENT

COLLEGE OF MANAGEMENT

MAHIDOL UNIVERSITY

2018

COPYRIGHT OF MAHIDOL UNIVERSITY

Thematic paper

entitled

RELATIVE VALUATION OF

DIAGEO PUBLIC LIMITED COMPANY

was submitted to the College of Management, Mahidol University

for the degree of Master of Management

on

January 6, 2018

……………………….….…..………

Asst. Prof. Nareerat Taechapiroontong,

Ph.D.

Advisor

……………………….….…..………

Duangporn Arbhasil, Ph.D.

Dean

College of Management

Mahidol University

……………….………….…..………

Mr. Clarke Baldwin

Candidate

……………………….….…..………

Asst. Prof. Piyapas Tharavanij,

Ph.D.

Chairperson

……………………….….…..………

Assoc.Prof. Tatre Jantarakolica,

Ph.D.

Committee member

ii

ACKNOWLEDGEMENTS

First, and foremost, I must express gratitude to Miss Wipawee Chaiyaphruk,

for without whom, I would never have begun this journey. Thank you for the excitement

you showed when you registered for your program and taking the extra time to explore

if Mahidol had a program that would interest me. Also, thank you for all the support

over the years, from listening to me complain, being a sounding board for ideas,

providing suggestions to improve my work, enduring my worst when stressed, and

pushing me when I seemed to be unable to find the motivation needed myself. Without

your support, this accomplishment would never have been realized.

Second, I would like to thank Mister Nikolai Usack and the rest of the

Andromeda Simulations International team. They provided me the support and

flexibility at work to manage both my professional and academic demands.

Third, I would like to thank the professors at Mahidol University.

Especially, Ajarn Vasan Siraprapasiri who taught us the various valuation methods

required to complete this paper and for guiding us through the thematic paper process;

Ajarn Piyapas Tharavanij for making time to answer questions in relation to our papers,

providing guidance to improve our work, and making classes on very dry subjects

enjoyable; Ajarn Nareerat Taechapiroontong for her role as advisor and valuable

suggestions provided; and all the rest of the professors I had over the past two years,

they made the overall journey enjoyable.

Lastly, I would like to thank the other students of the MMCF program,

though we did not grow as close as I had hoped when first beginning, every one of them

was supportive and helped get each other to the finish line. Good luck in your next

endeavours and may you find much success and happiness throughout your lives.

Clarke Baldwin

iii

RELATIVE VALUATION OF DIAGEO PUBLIC LIMITED COMPANY

CLARKE BALDWIN 5949011

M.M. (FINANCIAL MANAGEMENT)

THEMATIC PAPER ADVISORY COMMITTEE: ASST. PROF. NAREERAT

TAECHAPIROONTONG, Ph.D., ASSOC. PROF.TATRE JANTARAKOLICA,

Ph.D., ASST. PROF. PIYAPAS THARAVANIJ, Ph.D.

ABSTRACT

This thematic paper is the culmination of studying financial management

and valuation, applying the various techniques to a publicly traded stock. In particular

it focuses on the Diageo Public Limited Company (DGE) and seeks to provide a fair

value price for DGE stock on December 31, 2017, through the use of relative valuation

techniques.

The paper includes a look at Diageo plc’s business, macro-economic

analysis, global alcohol beverage industry analysis, competition analysis, investment

summary, valuation, financial statement analysis, and investment risk analysis. The

valuation method employed is a relative valuation using a simple average of four ratios:

trailing P/E ratio, forward P/E ratio, EV/EBITDA, and P/BV. To accomplish this it

required forecasting future earnings and calculating last twelve month EPS, next twelve

month EPS and next twelve month EBITDA in the context that Diageo’s fiscal year end

is June 30, and by UK standards only reports results on the halves (every 6 months).

The fair value price found for DGE is 25.934 GBP, less than 1 GBP below

the DGE price of 26.895 GBP as of December 22, 2017. In light of the highly

conservative approach taken in forecasting, a recommendation to “Hold” is presented.

KEY WORDS: Alcohol / Beer / Diageo / Distilled Spirits / Relative Valuation

85 pages

iv

CONTENTS

Page

ACKNOWLEDGEMENTS ii

ABSTRACT iii

LIST OF TABLES vi

LIST OF FIGURES ix

LIST OF ABBREVIATIONS xi

CHAPTER I VALUATION 1

1.1 Highlights 1

1.2 Business Description 4

1.3 Macro-Economic Analysis 8

1.4 Industry Analysis 10

1.5 Competition Analysis 14

1.6 Investment Summary 20

1.7 Valuation: Relative Valuation Model 22

1.8 Financial Statement Analysis 26

1.9 Investment Risks and Downside Possibilities 31

CHAPTER II DATA 38

2.1 Diageo PLC Company Information 38

2.2 Market Share Data 43

2.3 SWOT Analysis 65

2.4 Five Forces Analysis 66

2.5 Pernod Ricard Financial Statements 67

2.6 Financial Statement Analysis 69

2.7 Key Ratios 75

2.8 Pro Forma 76

2.9 Half-Year Calculations 78

2.10 Peer Selection 81

v

CONTENTS (cont.)

Page

2.11 Sensitivity Analysis 82

REFERENCES 83

BIOGRAPHY 85

vi

LIST OF TABLES

Table Page

1.1 Diageo Financial Summary 1

1.2 DGE Market Profile 2

1.3 Select Diageo Brands Categorized by Global Giants, Local Stars and

Reserve, Including Category Overall Percent of 2017 Net Sales

7

1.4 Diageo’s Spirit & Beer Brands, Including Percent Market Share and

Rank, by Volume, for 2016

8

1.5 2017 Financial Ratio Comparison of Diageo and Selected Peer Group 23

1.6 Five Year Pro Forma Income Statement for Diageo PLC 24

1.7 EPS and EBITDA Calculations for Last 12 Months and Next 12

Months

25

1.8 Relative Valuation Target Price Calculations 26

1.9 Diageo Return Ratio Analysis for Past Five Years 30

1.10 Diageo Risk Ratio Analysis for Past Five Years 31

2.1 Diageo PLC Officers & Directors 38

2.2 Diageo PLC Top 20 Investors 39

2.3 Diageo PLC Production Capacity vs. Actual Production 40

2.4 Diageo PLC Consolidated Balance Sheets, 2012 – 2017 41

2.5 Diageo PLC Consolidated Income Statements, 2012 – 2017 42

2.6 Diageo PLC Consolidated Statements of Cash Flow, 2012 – 2017 43

2.7 Global Distilled Spirit Market Share Data – Company Percent Market

Share, by Volume, 2011 – 2016

43

2.8 Global Distilled Spirit Market Share Data – Brand Percent Market


47

vii

LIST OF TABLES (cont.)

Table Page

2.9 Global Beer Market Share Data – Company Percent Market Share, by

Volume, 2011 – 2016

53

2.10 Global Beer Market Share Data: Brand Percent Market Share, by

Volume, 2011 – 2016

55

2.11 Pernod Ricard Consolidated Income Statements, 2012 – 2017 67

2.12 Pernod Ricard Consolidated Balance Sheets, 2012 – 2017 68

2.13 Common Size Analysis of Diageo PLC’s Income Statements, 2012 –

2017, Compared to Pernod Ricard in 2017

69

2.14 Common Size Analysis of Diageo PLC’s Balance Sheets, 2012 – 2017,

Compared to Pernod Ricard in 2017

70

2.15 Trend Analysis of Diageo PLC’s Income Statements, 2012 – 2017 71

2.16 Trend Analysis of Diageo PLC’s Balance Sheets, 2012 – 2017 72

2.17 Growth Analysis of Diageo PLC’s Income Statements, 2012 – 2017 73

2.18 Growth Analysis of Diageo PLC’s Balance Sheets, 2012 – 2017 74

2.19 Key Risk Ratios of Diageo PLC, 2013 – 2017 75

2.20 Key Return Ratios of Diageo PLC, 2013 – 2017 75

2.21 Assumptions Used for Creation of Five-Year Pro Forma for Diageo PLC 76

2.22 Support for Assumptions Used to Create Five-Year Pro Forma for

Diageo PLC

76

2.23 Five-Year Pro Forma for Diageo PLC 78

2.24 Key Full-Year Results for Diageo PLC, 2014 - 2017 78

2.25 First-Half Results for Diageo PLC, 2014 – 2017 79

viii

LIST OF TABLES (cont.)

Table Page

2.26 Calculations of the Percentage First-Half EPS and EBITDA Were of

Full-Year Results for Diageo PLC, 2014 – 2015

79

2.27 EPS and EBITDA Calculations for Last 12 Months and Next 12 Months

Using Historical Averages, Most Recent results and Pro Forma Results.

80

2.28 List of Companies’ and Selected Results Used for Determining Peer

Group for Relative Valuation Method

81

2.29 Diageo PLC Share Price Sensitivity Analysis Looking at Changes in

Assumed Growth Rate and Effective Interest Rate

82

ix

LIST OF FIGURES

Figure Page

1.1 DGE Stock Pricing 1

1.2 Diageo’s Key Income Statement Figures for Past Six Years 2

1.3 Distilled Spirits Production Process 4

1.4 Diageo’s Net Sales Breakdown by Category for Past Three Years 5

1.5 Diageo’s Net Sales Breakdown by Geographic Region for Past Three

Years

5

1.6 Diageo’s Volume Sold Breakdown by Geographic Region for 2017 6

1.7 Select Regions Percent of Diageo’s Sales for Past Five Years 9

1.8 Regional Percent of 2016 Global Consumption of Distilled Spirits, by

Volume

11

1.9 Regional Percent of 2016 Global Consumption of Beer, by Volume 11

1.10 Top Ten Companies’ Percent Share of Global Distilled Spirits Market,

by Volume, for 2016

15

1.11 Pernod Ricard’s Volume Breakdown and Group’s Global Position by

Category

16

1.12 Top Ten Brands’ Percent Share of Global Distilled Spirits Market, by

Volume, for 2016

17

1.13 Top Ten Companies’ Percent Share of Global Beer Market, by Volume,

for 2016

18

1.14 Top Ten Brands’ Percent Share of Global Beer Market, by Volume,

for 2016

19

1.15 2017 Net Sales Breakdown Comparison of Diageo and Select

Competitors

19

1.16 DGE Trailing P/E Band for Past Five Years 22

x

LIST OF FIGURES (cont.)

Figure Page

1.17 DGE Forward P/E Band for Past Five Years 23

1.18 Diageo and Select Competitors’ Net Revenue for Past Five Years 27

1.19 Diageo and Select Competitors’ Profit for Past Five Years 27

1.20 Diageo and Pernod Ricard’s EBIT for Past Six Years 28

1.21 Diageo and Pernod Ricard’s Finance Charges for Past Six Years 28

1.22 Balance Sheet Common Size Analysis, Diageo’s Past Six Years and

Pernod Ricard’s 2017 Results

29

1.23 Diageo and Pernod Ricard’s ROE for Past Five Years 29

1.24 Diageo and Pernod Ricard’s ROA for Past Five Years 30

1.25 Diageo Total Global Packaging Materials and Percent Breakdown by

Type for Past Three Years

32

1.26 GBP to USD Exchange Rate, December 22, 2012 – December 22,

2017

33

1.27 GBP to EUR Exchange Rate, December 22, 2012 – December 22,

2017

34

1.28 Diageo’s Total Raw Materials and Percent Breakdown by Type for

Past Three Years

36

1.29 Diageo Investment Risk Matrix 37

2.1 SWOT Analysis of Diageo PLC 65

2.2 Porter’s Five Forces Analysis of Diageo PLC 67

2.3 Diageo PLC Share Price Sensitivity Spider Graph 82

xi

LIST OF ABBREVIATIONS

ABV Alcohol by Volume

AMORT Amortization

APAC Asia Pacific

ASSOC Associates

AVG Average

BPS Basis Point

CAGR Compound Annual Growth Rate

CAP Capitalization

CCC Cash Conversion Cycle

CMS Common Size

COGS Cost of Goods Sold

CONT OPS Continuing Operations

CSL Capital Structure Leverage

DEPR Depreciation

DGE Diageo Public Limited Company

DIV Dividend

EBIT Earnings before Interest and Taxes

EBITDA Earnings before Interest, Taxes, Depreciation and Amortization

EBT Earnings before Taxes

EL Earning Leverage

EPS Earnings per Share

ERT Europe, Russia and Turkey

EU European Union

EUR Euro

EURGBP Euro-to-British Pound Exchange Rate

xii

LIST OF ABBREVIATIONS (cont.)

EV Enterprise Value

FY Fiscal Year

GBP Great British Pound

ICP Inventory Conversion Period

IMF International Monetary Fund

IMFL Indian-Made Foreign Liquor

IMPAIR Impairment

INT Interest

IWSR International Wine and Spirit Report

JV Joint Ventures

JW Johnny Walker

LA&C Latin America and Caribbean

LSE London Stock Exchange

LT Long-Term

LTM Last Twelve Months

MAX Maximum

MIN Minimum

NA North America

NTM Next Twelve Months

OECD Organisation for Economic Co-operation and Development

OPEB Other Post-Employment Benefits

P/BV Price-to-Book Ratio

P/E Price-to-Earnings Ratio

PDP Payable Deferral Period

PET Polyethylene Terephthalate

PM Profit Margin

xiii

LIST OF ABBREVIATIONS (cont.)

PP&E Property, Plant and Equipment

PR Pernod Ricard

RCP Receivables Collection Period

ROA Return on Assets

ROE Return on Equity

RTD Ready-to-Drink Beverages

SG&A Sales, General and Administrative

ST Saint

STD Standard Deviation

SWOT Strength, Weakness, Opportunities and Threats

TATO Total Asset Turnover

TC Tax Change

TECH Technology

TM Tax Management

UK United Kingdom

US United States

USA United States of America

USD United States Dollar

YR Year

1

Source: Reuters & Group Calculations

Chapter I

Valuation

1.1 Highlights

Date: December 22, 2017 Target Date: December 31, 2017

Ticker: LSE: DGE Recommendation: Hold

Price: GBP 26.895 Target Price: GBP 25.934

Table 1.1: Diageo Financial Summary

Figure 1.1: DGE Stock Pricing


2

Table 1.2: DGE Market Profile

Figure 1.2: Diageo’s Key Income Statement Figures for Past Six Years

1.1.1 Valuation is indicative of Hold: With the target price at 25.934 GBP

at the end of calendar year 2017, there is 3.57% downside. The current situation is driven

by lots of uncertainty in Europe and Asia. However, if management is able to decrease

their effective interest rate to approximately 2.1% we see a share value of 26.504 GBP

for the same conservative growth rate, a downside of only 1.45%. In addition, if the


Source: Diageo Annual Reports

3

growth rate reaches the high end of projections (6.40%) we see a share price of 26.953

GBP, holding all else equal, providing an upside of 0.22%. We also see the fundamentals

remaining strong with relatively high liquidity and a trend towards less debt funding.

1.1.2 Moderate Growth for foreseeable future: Diageo is a mature

company in a mature industry. It is also already the largest producer of spirits in the

world. Management’s guidance is mid-single digit sales growth for the medium term.

Analyst consensus for Diageo is 4.2%, market research firms range from 2.1% CAGR

to 6.4% CAGR for the industry as a whole. We feel Diageo is entering a period of low

to moderate stable growth for the near term.

1.1.3 India & Asia to drive growth: The urbanization and growing middle

class in many Asian countries will help drive much of the growth over the near-term. In

addition, the expansion in India and experimentation with main stream spirits will help

capture some of the informal market. Successful implementation of main stream spirits

in India, will lead to further attempts to capture more of the informal market (estimated

at 25% of Global Market) in other countries.

1.1.4 Reentrance into hottest market - Irish Whiskey: The Irish Whiskey

category has been one of the fastest growing alcohol categories over the past 10 years,

seeing 131% growth. Diageo has been out of the market since disposing of Bushmills

in the Don Julio acquisition deal during 2015. Diageo has reentered the market with Roe

& Co. Irish Whiskey, made from sourced spirits. They plan to have a distillery

operational at the St. James Gate Brewery within 3 years.

1.1.5 International uncertainty influencing current situation: Brexit has

created lots of uncertainty in Europe, Diageo’s home market, in regard to exchange

rates, interest rates and trade agreements. China has a large growing middle class, but

some experts speculate it is heading towards balanced growth from its days of boom

growth. Uncertainty of regulations in other countries also continue to affect sales, for

4

example the Highway Ban in India drastically shrinking the countries market by banning

sales of alcohol within 500 meters of state and national highways.

1.2 Business Description

Figure 1.3: Distilled Spirits Production Process

Diageo PLC was formed in 1997 from the merger of Guinness and Grand

Metropolitan. It has grown into a multinational alcoholic beverage company,

headquartered in London, England. Currently they are the leading international spirits

player in every region of the world.

The company competes in multiple categories, including distilled spirits and

beer. They own manufacturing production facilities around the world, including

maltings, distilleries, breweries, packaging plants, maturation warehouses, cooperages

and distribution warehouses. In all, it currently operates more than 140 sites globally,

and has a presence in over 180 countries.

Source: http://spirits.eu/spirits/a-spirit-of-tradition/distillation-process

5

Figure 1.4: Diageo’s Net Sales Breakdown by Category for Past Three Years

Reporting is broken into five main geographic segments: North America;

Europe, Russia and Turkey; Africa; Latin America and Caribbean; and Asia Pacific. It

manages its operations from locations in the United Kingdom, Ireland, the United States,

Canada, Mexico, Brazil, Italy, Turkey, India, Singapore, Australia, Nigeria, South

Africa, East Africa and Africa Regional Markets.

Figure 1.5: Diageo’s Net Sales Breakdown by Geographic Region for Past Three

Years



6

Figure 1.6: Diageo’s Volume Sold Breakdown by Geographic Region for 2017

Under current management, they strive to be one of the best performing,

most trusted and respected consumer products companies in the world. They aim to

grow their participation in international premium spirits to capture demand from the

trend of rising populations and growing middle classes globally. They also seek to

capture the demand from increased popularity of spirits in emerging markets.

In developed markets this means driving premiumization through price tiers

up to their Reserve labels. In emerging markets, it means moving away from an import-

based model to becoming a local player.

Source: Diageo Annual Report

7

Table 1.3: Select Diageo Brands Categorized by Global Giants, Local Stars and

Reserve, Including Category Overall Percent of 2017 Net Sales

1.2.1 Products and Brands

Diageo PLC has products at almost every price point in every category. Its

principal products include Beer, Scotch Whisky, Gin, Vodka, Rum, Irish Cream

Liqueur, Raki, Liqueur, Tequila, Canadian Whisky, American Whiskey, Cachaça,

Whisky, Brandy, Wine, Ready-to-Drink Beverages, and Progressive Adult Beverages.

The company has over 200 brands to serve these various products, but their business is

primarily built around their six biggest global brands: Guinness, Johnny Walker,

Smirnoff, Captain Morgan, Tanqueray, and Baileys.


8

Table 1.4: Diageo’s Spirit & Beer Brands, Including Percent Market Share and

Rank, by Volume, for 2016

1.3 Macro-Economic Analysis

Analysts expect the global economy to grow an estimated 3.2% in 2018.

Developing economies should lead global growth as higher commodity prices and

improved fiscal positions support their growth. In 2019, growth is projected to fall to

3.1% due to higher inflation and less friendly monetary policies in advanced economies.

There is an estimated 500 million new legal age consumers expected to

come to the market over the next ten years. Approximately half of this increase is to be

seen in the emerging markets of India and Africa. There is also expected to be an

Source: Euromonitor International


9

increase of 730 million consumers over the next ten years that will be able to afford

international style alcohol – 85% of this to be seen in emerging markets.

1.3.1 Emerging Markets

Key growth drivers to the global alcohol beverages market are changing

lifestyles, increasing social parties, and perception that consumption of alcohol relaxes

the mind. These are especially visible in emerging markets. The growth in legal drinking

age population is to be predominately driven by population growth in emerging markets.

These growing populations are also seeing an increased shift to urban populations along

with increasing disposable incomes.

Figure 1.7: Select Regions Percent of Diageo’s Sales for Past Five Years

1.3.2 E-Commerce, Digital/Social Media and Millennials

Technology has been radically changing the landscape of business around

the world. E-Commerce is opening up new channels for all products to be marketed and

sold through, the alcohol beverage industry is also affected and poised to benefit from

it. Also, digital and social media has opened up new ways for companies to connect and

interact with their customers, especially useful for products that rely on loyalty or sell a

‘lifestyle.’


10

The millennial demographic is especially influenced by their peers and by

experts, they consider word of mouth in important part of gathering ideas and advice on

what to buy, leading them to choose premium products and have been seen to be more

likely to equate price with quality. Digital and social media has become a primary way

for them to communicate with their peers and experts. Companies able to successfully

navigate social media are able to tap into this demographic, connect more intimately

with their target consumer and potentially drive new trends. Millennials are also

expected to drive e-commerce sales in the coming years.

1.3.3 Brexit

With Diageo PLC headquartered in London, along with a nontrivial amount

of production as well, Brexit does create uncertainty and risk. The effects it will have

on markets and economy are still unknown, and it is unlikely that the spirit industry will

be untouched. Trade agreements are currently being honored, but they will need to be

renegotiated. Uncertainty will continue to hang over the world and the beverage

industry, especially UK produced spirits like Scotch and Gin, which potentially lose

ground in other markets to locally produced products.

1.3.4 China

China’s transition from booming growth to a period of more balanced

growth could lead to lower global demand and a drop in commodity prices. As China

moves up the value chain and increases imports of consumption goods, other emerging

markets could stand to gain. Depending on how this transition is handled, it could

potentially result in more sustainable global growth.

1.4 Industry Analysis

The global alcohol beverage market has been profitable and growing, this

trend is expected to continue into the foreseeable future. It is forecasted to surpass 1,977

billion USD by the end of 2025, from an estimated worth of 1,205 USD billion in 2017.

This would equate to a moderate 6.4% CAGR between 2017 and 2025.

11

The Asia Pacific region is projected to hold dominance in the global

alcoholic beverages market from 2017 to 2025, expecting to account for a significant

market share by the end of 2025. This will be driven by the rising middle-class

population and popularity of e-commerce.

Figure 1.8: Regional Percent of 2016 Global Consumption of Distilled Spirits, by

Volume

Figure 1.9: Regional Percent of 2016 Global Consumption of Beer, by Volume

Source: Pernod Ricard Annual Report, 2016-2017.

Based on IWSR volume data year-end 2016.

Source: Kirin Holdings Company, Limited Data Book 2016

12

1.4.1 Developed Markets

Many consumers are moving to ‘quality over quantity’ as they attempt to

develop their tastes while maintaining a balanced lifestyle. These consumers are

prepared to pay a premium for high-quality brands with heritage and provenance.

Consumers are found to be increasingly drawn to traditions and heritage,

wanting to know the stories behind what they consume. This search for authenticity is

also driving the ‘craft’ product boom. This trend is most developed in beer, but is rapidly

expanding to distilled spirits. Breweries, wineries, and distilleries are seeing an

explosion in tourism as today’s consumers (especially Millennials) love supporting local

and learning about the background of what they are drinking.

Millennials are also driving a resurgence of ‘cocktail’ culture, coupled with

the increased taste for premium spirits, spirits are stealing greater market shares from

brewers.

1.4.2 Emerging Markets

Penetration by formal producers in emerging markets is low compared to

developed markets. The world’s informal alcohol market is predominately found in

emerging markets, this informal market is approximated at 25% of alcohol sales

globally. Unregulated production and sale of alcohol presents health risks to consumers

and impacts the overall collection of taxation. Thus, an important and large opportunity

is mainstream spirits, providing consumers access to safe, branded products at

affordable price points.

1.4.3 Whiskey

Whiskey continues to diversify, seen in the explosion of craft distilleries in

the US, growing popularity of flavored whiskeys and solid growth of Irish whiskey. The

whole whiskey category looks primed for continued growth. Further diversification and

growth will be driven by experimenting with aging conditions, selection of the wood,

experimenting with different yeast strains and new flavor profiles. The new and growing

appreciation of Millennials for brown spirits has helped jumpstart an American Whiskey

revival – they particularly love Bourbon, and are now drinking Rye and Scotch.

13

Irish Whiskey sales continue to rise, thanks in part to a broad demographic

of consumers. Unlike its counterparts, Irish Whiskey tends to be sweeter and smoother,

gaining women among its loyal drinkers -approximately 40% of consumers are female.

It has also become a natural ingredient for craft cocktails. Irish Whiskey also possesses

a strong and diverse premium segment that appeals to today’s craft drinkers.

1.4.4 Vodka

Since, the flavored-vodka craze died down, the category has struggled to

adjust to recent market trends. However, Vodka still represents almost 34% of all spirits

sales, more than any other category. Consumers are seen to be less excited about

premium vodka, preferring non-premium vodka.

1.4.5 Gin

Like other categories, Gin is seeing a renaissance driven through craft

distillers that are experimenting with new flavors and botanicals. Multinationals that

once dominated the category are seeing more competition due to this.

1.4.6 Rum

The rum category has been stagnant, but has the potential to grow if it can

exploit the same trends as other categories (e.g., Whiskey), in particular offering more

premium products and/or focus on single barrel opposed to blended, longer maturation,

experimenting with barrels, emphasizing country of origin and source of the molasses

or sugar cane juice.

1.4.7 Tequila

Consumer attitudes toward Tequila have changed in recent years, and

premium tequila is gaining more shelf space. Tequila brands have done well retaining

the artisanal traditions and handmade qualities, which has led to premium Tequila

products being particularly embraced by Millennials (who appreciation all things craft).

Brands have also pushed to get consumers to think of top-shelf tequila in the same way

14

they do whiskey: as a spirit that can be enjoyed for its smoothness and complexity of

flavors.

1.4.8 Cider

Hard cider exploded in 2014 to over 28 million 2.25-gallon cases. It has

continued to outpace the beer market as a whole. Cider has specific advantages with

consumers, as it is a refreshing alternative to higher ABV products. It also appeals across

genders, with a demographic split of nearly 50/50 between men and women.

1.4.9 Lifestyle Products

Holistic lifestyle products continue to grow across markets as consumers

continue to seek gluten free, dairy free, vegetarian/vegan friendly, low calorie and low

sugar products.

1.4.10 Regulations and Advertising Restrictions

Operating in the global alcohol beverage industry is subject to extensive

regulatory compliance in the areas of production, product liability, distribution,

importation, marketing, promotion, sales, pricing, labelling, packaging, advertising,

labor, pensions, compliance and control systems and environmental issues.

Restrictions on advertising, marketing and sales of alcohol around the world

are impacting sales. Restrictions range from complete prohibition of alcohol in certain

countries/cultures to restrictions on advertising style, media and messaging used. A

number of countries prohibit television as a marketing medium, while others carefully

regulate it. Similarly, many countries regulate the use of internet-based and social media

marketing in relation to alcohol. This has the impact of newly launched drinks not

reaching the intended consumers.

1.5 Competition Analysis

Diageo’s brands compete on the basis of consumer loyalty, quality and

price.

15

The global alcohol beverage market is highly fragmented in nature, driven

by the presence of many small firms that operate in regional and/or local markets and

several larger firms with global foot prints. According to Euromonitor International data

from the calendar year 2016, the 10 largest global spirits companies control less than

30% of the total global market, by volume. Diageo is #1 capturing 9.3% share of the

global spirit market, by volume, and have 4 of the top 20 brands globally by volume -

McDowell’s 2.3%, Smirnoff 1.1%, Johnnie Walker 0.6%, and Old Tavern 0.5%.

1.5.1 Distilled Spirits

In distilled spirits, Diageo’s major global competitors are Pernod Ricard

Groupe, Beam Suntory, and Brown-Forman Corporation. Each company has several

brands that compete directly with Diageo’s in various categories and at various price

points. Diageo also faces competition from regional and local companies in the various

countries it operates in.

Figure 1.10: Top Ten Companies’ Percent Share of Global Distilled Spirits Market,

by Volume, for 2016

1.5.1.1 Pernod Ricard: The second largest Distilled Spirits

producer globally, headquartered in France. Competes with Diageo in virtually every

market and at every price point. They are actively seeking to become the leader. Major

Brands include: Jameson, Glenlivet, Malibu, Absolut, and Beefeater.


16

Figure 1.11: Pernod Ricard’s Volume Breakdown and Group’s Global Position by

Category

1.5.1.2 Beam Suntory: Beam Suntory is part of Suntory

Holdings Ltd. of Japan, and competes in many of the markets that Diageo does. The

group produces more than just Spirits and Beer, a large portion of their business is non-

alcoholic beverages and food. Major Brands include: Jim Beam, Laphroaig, Yamazaki,

Hibiki, Courvoisier, Maker’s Mark, Pinnacle, and Sauza.

1.5.1.3 Brown Forman: The Brown-Forman Corporation is one

of the largest American-owned companies in the spirits and wine business. It competes

in many of the same markets and categories as Diageo. Major Brands include: Jack

Daniel’s, Woodford Reserve, The Benriach, Don Eduardo, Finlandia, Chambord, and

Korbel.

Source: Pernod Ricard’s Annual Report

17

Figure 1.12: Top Ten Brands’ Percent Share of Global Distilled Spirits Market, by

Volume, for 2016

1.5.2 Beer

In the beer market, Diageo competes globally, regionally and locally

(depending on the region) with several competitors, including AB InBev, Heineken,

Molson Coors, Carlsberg and Constellation Brands. Diageo ranks 12th capturing

approximately 1% of market share of the global beer market, by volume. Diageo’s

largest brand is Guinness, which ranks 40th in the world and captures approximately

0.4% of the global beer market, by volume.

1.5.2.1 AB InBev: AB InBev beverage and brewing company.

They are the world’s largest brewer, and have over 400 beer brands. Major brands

include: Beck’s, Budweiser, Hoegaarden, Leffe, and Stella Artois.

1.5.2.2 Heineken: A Dutch brewing company that owns over

165 breweries. It produces 250 brands of beer and cider around the world. Major brands

include: Heineken, Tecate, Amstel, Fosters, Tiger, and Strongbow.


18

Figure 1.13: Top Ten Companies’ Percent Share of Global Beer Market, by

Volume, for 2016

1.5.2.3 Molson Coors: Formed from the merger of Molson of

Canada and Coors of the United States. They are the seventh largest brewer by volume.

Major brands include: Blue Moon, Coors, Crispin, Miller, and Molson.

1.5.2.4 Carlsberg: A global brewer predominately located in

Western Europe, with headquarters in Denmark. Major brands include: Carlsberg,

Elephant Beer, Beerlao, Kronenbourg, Holsten, and Somersby Ciders.

1.5.2.5 Constellation Brands: Constellation Brands, Inc. is an

international producer and marketer of beer, wine and spirits. Constellation is the largest

beer import company measured by sales in the US, and has the third-largest market share

(7.4 %) of all major beer suppliers in the US. Major brands include: Corona, Modelo,

Svedka Vodka, Arbor Mist, and Black Box wines.


19

Figure 1.14: Top Ten Brands’ Percent Share of Global Beer Market, by Volume,

for 2016

Figure 1.15: 2017 Net Sales Breakdown Comparison of Diageo and Select

Competitors


Source: Annual Filings & Group Calculations

20

1.6 Investment Summary

1.6.1 Expansion Back into Irish Whisky

After disposing of Bushmills in the deal to acquire Don Julio, Diageo has

reentered the fast growing Irish Whiskey market with Roe & Co. Irish Whiskey.

Currently, it is produced from sourcing the whiskey from other producers, but Diageo

has plans to renovate the old power plant building at St. James Gate Brewery into a

distillery. Operations at the distillery are projected to begin within 3 years. The Irish

Whiskey category has been one of the fastest growing alcohol categories over the past

10 years, seeing 131% growth.

1.6.2 Growth of Whisky Market

According to IWSR predicts that “other” whiskies, especially Indian, will

be the largest contributor to the overall spirits category from 2017 – 2021. Diageo is

well positioned for this being the no.1 producer of Scotch, and having many offerings

within other whisky categories. Diageo also owns more than 54% in the no. 1 distiller

in India and will benefit from their growth as well.

1.6.3 Premiumization

The global trend in developed markets is moving toward high-quality,

premium brands. So, even though growth by volume has slowed in many categories,

high prices are able to be achieved helping drive overall growth. In addition, many

categories still present an opportunity to capture this trend as it has only been

predominately seen in the Whisky category. For example, Gin is seeing a resurgence as

of late and Rum could easily follow some of the same methods used with Whisky, like

different barrel aging. Diageo competes in every price range, and has many brands that

can help them capture/stay relevant in the premiumization trend.

1.6.4 India & Mainstream Spirits

Diageo owns controlling interest in the largest distiller in India, and India is

projected to be a major part of what drives the growth over the next few years. In

21

addition, they are innovating in India through mainstream spirits. Mainstream spirits are

low cost alcohols that try to capture market share of the informal alcohol market

(estimated to be 25% of the overall global market), by providing safe, branded alcohol

to consumers. Following success in the India market, there are plans to implement

similar tactics in other emerging markets. Gaining market share and building loyalty

with new customers will help drive growth in India and other emerging markets in the

future.

1.6.5 Growing Number of Consumers

The number of consumers of legal drinking age in general is expected to

grow by approximately 500 million over the next 10 years. This will help drive global

growth. With Diageo operating in much of the world, they will be positively impacted

by this.

1.6.6 Consumer Disposable Income Growing

Globally, consumers’ disposable income is growing, especially in China’s

middle class, and other emerging markets as more of the population moves to urban

areas. This increase in disposable income allows them to increase spending on non-

essentials like alcohol. The perception of drinking alcohol for relaxation coupled with

this can help lead to increased spending. As Diageo competes at every price point, if

they can capture the movement up in brands, they can increase their financial

performance by capturing greater margins.

1.6.7 Millennials & Changing Landscape

Millennials have been the main driver of premiumization as they are more willing to

pay for perceived quality or heritage brands. They have also helped rejuvenate the

cocktail culture that is helping spirits growth. In addition, their social media trends have

changed the way loyalty brands can market, interact and stay connected with direct

consumers. As more millennials enter the market, they will have a growing impact on

trends. Diageo should be positioned well to capture this demographic and the trends in

22

the market it creates through its many heritage and premium brands, while also

increasing their craft brands.

1.7 Valuation: Relative Valuation Model

To value Diageo, we have chosen to use a relative valuation method through

four multiples: Trailing P/E, Forward P/E, P/BV and Forward EV/EBITDA. Using these

four multiples we arrived at four target prices and averaged them together to get a fair

price for Diageo shares.

First, we plotted Trailing and Forward P/E bands based on 5 years past

history. In doing so, we found that in relation to itself, Diageo is overvalued. Diageo’s

current trailing P/E is between one standard deviation and 2 standard deviations above

its 5-year mean. Diageo’s Forward P/E is greater than 2 standard deviations above its 5-

year average.

Figure 1.16: DGE Trailing P/E Band for Past Five Years


23

Figure 1.17: DGE Forward P/E Band for Past Five Years

We then determined a group of peers to compare Diageo with. To do so, we

compared many characteristics including: market cap, debt-to-equity, ROE, long-term

growth, and others. For each characteristic compared, we tried to limit the chosen firms

to the companies that were within 1 standard deviation of Diageo’s value. After looking

at many companies, we narrowed it down to five. The five firms used as peers are:

Pernod Ricard SA., Heineken NV, Brown-Forman Corporation, Molson Coors Brewing

Company, and Thai Beverage PCL.

Table 1.5: 2017 Financial Ratio Comparison of Diageo and Selected Peer Group



24

Next, we forecasted EPS and EBITDA for Diageo by creating a pro forma

income statement for future years. For the growth rate we compared various experts,

and decided to use the most conservative growth rate of 2.4% for Distilled Spirits and

2.1% for the rest of the industry. For the fiscal year 2018, we projected a profit of 2,832

million GBP attributable to the Equity Shareholders, and for fiscal year 2019, we

projected a profit of 3,001 million GBP attributable to the Equity Shareholders of

Diageo.

Table 1.6: Five Year Pro Forma Income Statement for Diageo PLC

Diageo’s fiscal year end is June 30, and the UK no longer requires quarterly

reporting, so to project a target price for Dec. 31, 2017 we need to calculate the last

twelve months (LTM) EPS and the next twelve months (NTM) EPS and EBITDA for

comparing to the ratios. To do this, we first looked at past annual reports and interim

reports to get an average percent that the 1st half of the year contributes to EPS and

EBITDA. We then multiplied these percentages by the forecasted results to get 1st half

results. Then for the LTM EPS calculation we used the last half of FY2017 actual results

and added the forecasted results for the first half of FY2018. Similarly, for the NTM

EPS and EBITDA calculations, we used the forecasted results for the second half of

Source: Diageo Annual Filings & Group Calculations

25

FY2018 and first half of FY2019. Doing this we arrive at an LTM EPS of 1.51 GBP,

and NTM EPS and EBITDA of 1.164 GBP and 4,972 GBP millions, respectively.

Table 1.7: EPS and EBITDA Calculations for Last 12 Months and Next 12 Months

Using the values for LTM EPS and NTM EPS and EBITDA, we are able to

multiply them by their respective ratios to arrive at target prices for Diageo shares. We

also use the book value from the most recent results, which are fiscal year 2017, of

12,028 GBP million. Using Trailing EPS, we arrive at a target price of 25.674 GBP.

Forward P/E yields a target price of 26.310 GBP. For EV/EBITDA, after multiplying

the projected EBITDA by the peer average of 15.78, we arrive at an estimated enterprise

value of 78,489 GBP millions. From here we added in the value of cash and cash

equivalents from the most recent balance sheet and subtracted the value of debt and non-

controlling interests. This then provides an equity value for Diageo of approximately

68,923 GBP millions, and a target share price of 27.318 GBP. Finally, the P/BV

calculation comes to a target price of 24.432 GBP.


26

Table 1.8: Relative Valuation Target Price Calculations

1.7.1 Fair Market Price

To arrive at a fair market price for Diageo shares, we took the four target

prices calculated above and averaged them together with equal weighting. This provided

a fair price for Diageo shares of 25.934 GBP. Comparing this with the current price of

26.895, we recommend to hold as we are very conservative in our assumptions and see

lots of upside.

1.8 Financial Statement Analysis

1.8.1 Income Statement

1.8.1.1 Continued Improvement in Gross Margin and Operating

Profit: Diageo is a few years into a cost reduction program. The program is aimed at

improving Gross Margin through decreasing the COGS and Operating Profit through

cost savings and efficient use of resources. Gross profit improved to 7,370 million GBP

from 6,234 million GBP, a decrease from COGS being 40.5% of Net Sales to 38.8%.

Overall SG&A remained the same percent of Net Sales (14.9%), allowing for Operating

Profit to improve from 2,841 million GBP in 2016 to 3,559 million GBP in 2017. The

program has been very successful thus far, and management has increased the guidance

of 100bps improvement in Gross Profit Margin to 175bps.

Source: Diageo Annual Filings, Reuters & Group Calculations

27

Figure 1.18: Diageo and Select Competitors’ Net Revenue for Past Five Years

Figure 1.19: Diageo and Select Competitors’ Profit for Past Five Years

1.8.1.2 Finance Charges Decline: Finance charges have

continued to decline both in terms of value (over the past 3 years) and as percent of net

sales (over the past 5 years). This is in line with the decrease in non-current debt over

that same period. This should continue as they seek to maintain the leverage guidance

of 2.5x – 3.0x Net Debt to EBITDA ratio.

Source: Annual Filings


28

Figure 1.20: Diageo and Pernod Ricard’s EBIT for Past Six Years

Figure 1.21: Diageo and Pernod Ricard’s Finance Charges for Past Six Years

1.8.2 Balance Sheet

1.8.2.1 Assets Remain Relatively Stable: Most asset accounts

saw a slight uptick from last year, with the total assets growing from 28,491 million

GBP to 28,848 million GBP. The percent to total assets for most accounts remained

stable from last year.

1.8.2.2 Strengthening of Balance Sheet: As mentioned above the

value and percent of total assets of non-current debt has continued to fall, 8,071 million

GBP (2016) to 6,583 million GBP (2017) and 28.3% (2016) to 22.8% (2017). Despite

this decrease in funding through non-current debt, the Balance Sheet has continued to



29

expand (28,491 million GBP to 28,848 million GBP) driven by the growth of retained

earnings from 6,386 million GBP to 8,168 million GBP.

Figure 1.22: Balance Sheet Common Size Analysis, Diageo’s Past Six Years and

Pernod Ricard’s 2017 Results

1.8.2.3 ROE Grows Slightly: ROE has been falling over the past

2 years, but grew slightly this year to 24.96% from 24.31%. The decrease had been due

to lowering the debt-to-equity level (0.99 to 0.75), but was offset this year by the

increase in profits from last year, 2,362 million GBP to 2,772 million GBP.

Figure 1.23: Diageo and Pernod Ricard’s ROE for Past Five Years



30

Figure 1.24: Diageo and Pernod Ricard’s ROA for Past Five Years

Table 1.9: Diageo Return Ratio Analysis for Past Five Years



31

Table 1.10: Diageo Risk Ratio Analysis for Past Five Years

1.9 Investment Risks and Downside Possibilities

1.9.1 Brexit

Diageo is headquartered in the United Kingdom and has significant

production and investment in Scotland. The UK has officially initiated the process for

leaving the European Union. The terms of this withdrawal are uncertain and negotiations

could last more than 2 years. The uncertainty is anticipated to last for a sustained period

while the UK finalizes the details to the withdrawal from the EU and negotiates trade

agreements with other countries. The UK’s withdrawal from the EU could also

negatively impact economic conditions in Europe and adversely affect Diageo’s

business and financial results. For example, the process could lead to exchange rate

volatility or risk to supply chains.

The withdrawal of the United Kingdom from the European Union could also

impact the makeup of the United Kingdom as the individual members discuss

independence and border issues. This could result in further political uncertainty and

potentially affect Diageo’s business and financial results, especially since Diageo has

the aforementioned large footprint in Scotland.


32

1.9.2 Political & Economic Instability

Diageo’s business is dependent on the general conditions in its most

important markets, especially the USA, UK, and other countries that form the EU. Any

downturn in economic conditions in any of these markets, could lead to decreased

consumer confidence and consumer spending, thus reducing demand for Diageo’s

products. An economic downturn could also adversely impact Diageo’s customers and

suppliers, which in turn could adversely affect Diageo’s business and financial results

from destocking or increased bad debt expense.

There is an increased risk in emerging markets and a substantial portion of

Diageo’s operations are conducted in emerging markets (approximately 42% of net sales

in FY2017). Changing environments in emerging markets can affect Diageo’s ability to

import or export products and to repatriate funds, as well as, impact levels of demand.

Depending on the severity of the impact, risks could have a material effect on the

financial results of the business.

Figure 1.25: Diageo Total Global Packaging Materials and Percent Breakdown by

Type for Past Three Years


33

The political and economic climate of recent years has led to an increased

focus on tax collection and vigor to challenge methodology used by multinational

companies to compute tax burden. Changes in tax laws (including tax rates), tax treaties,

accounting policies and accounting standards can possibly result in litigation or other

actions by relevant tax authorities.

1.9.3 Exchange & Interest Rates

As a global company a significant portion of their income comes in the form

of the local currencies of the countries they are operating in, while the results are

presented in GBP. Diageo is thus exposed to exchange rate risks that can affect the

valuation of transactions, and translation of its operations and net assets in other locales

back to GBP. Any large adverse movements in the pound can have a significant impact

on the reported results from year to year. Exchange rate movements can also increase

interest expense on non-pound denominated borrowings. Likewise, Diageo can be

negatively impacted by fluctuations in interest rates, leading to increased costs on debt.

Figure 1.26: GBP to USD Exchange Rate, December 22, 2012 – December 22, 2017


34

Figure 1.27: GBP to EUR Exchange Rate, December 22, 2012 – December 22, 2017

1.9.4 Change in Regulations

Diageo’s operations have heavy regulatory requirements in regard to

production, distribution, importation, marketing, advertising, promotion, sales, pricing,

labelling, packaging, product liability, labor, pensions, antitrust, compliance and control

systems, and environmental issues. Changes to any of these regulations or compliance

requirements could adversely affect Diageo’s business through additional costs or

liabilities. For example, countries where Diageo operates could impose new labelling,

product or production requirements, limitations on the marketing activities, restrictions

on retail outlets, restrictions on importation and distribution or other restrictions on the

locations or occasions where alcohol beverages can be sold, which can impact the sales

of Diageo products. .

1.9.5 Changing Consumer Tastes

Diageo’s competitive position relies heavily on its ability to offer high-

quality products that appeal to a wide audience. Consumer preference, whether on a

global scale or local, can change due to many factors, including changes in

demographics, changing social trends, changes in travel, vacation/leisure activity

patterns, weather conditions, and/or economic downturn. All of these can reduce a

consumers’ willingness or ability to purchase products from Diageo.


35

In addition, the social acceptability of Diageo’s products could decline

depending on the general view on alcohol consumption. This could also lead to

regulatory action, litigation or customer complaints against companies in the industry

and have an adverse effect on Diageo’s business and financial results.

1.9.6 Increased Competition

Diageo faces substantial competition in the countries that it operates and

competes with other companies across a wide range of channels and occasions. The

beverage industry has experienced continuing consolidation among major global

producers, as well as, among customers in many countries. This could lead to stronger

competitors, increased pressure from customers, negative impact to distribution

network, downward pressure on prices, and/or decline in market share for Diageo. Any

decline in demand or consumer spending could also lead to increased competition for

market share. Any of these factors may adversely affect Diageo’s results and potential

for growth.

1.9.7 Litigation

Alcohol beverage companies can be exposed to class action or other private

or governmental suits in relation to alcohol advertising, product liability, alcohol abuse

problems or other health consequences arising from the misuse of alcohol. Diageo is

also at risk of litigation, enforcement or other regulatory actions by tax, customs,

competition, environmental, anti-corruption and other relevant regulatory authorities,

including the methodology for assessing importation value, transfer pricing or

compliance matters. Any litigation can result in damages, penalties or fines. It can also

lead to damage to the reputation of Diageo or its brands, and/or impact the ability of

management to focus on business matters, which could adversely affect Diageo’s

business and financial results.

1.9.8 Climate Change

There is growing concern that climate change is having an adverse effect on

global temperatures, weather patterns and severity of extreme weather events. Climate

36

change, or just the measures enacted to address climate change, could have a negative

effect on agricultural productivity in the many regions Diageo procures/sources its raw

materials. Diageo could suffer decreased supply or increased prices for a number of the

raw materials necessary to produce Diageo’s products, including sugar, cereals, hops,

agave and grapes.

Figure 1.28: Diageo’s Total Raw Materials and Percent Breakdown by Type for

Past Three Years

Water is the main ingredient in substantially all of Diageo’s products, and it

is a limited resource in many parts of the world that Diageo operates. As demand for

water continues to increase, and if water becomes scarcer or the quality of available

water decreases, Diageo may face increasing production costs or capacity constraints,

which in turn could adversely affect Diageo’s business and financial results.


37

Figure 1.29: Diageo Investment Risk Matrix


Risk Matrix

38

Chapter II

Data

2.1 Diageo PLC Company Information

2.1.1 Officers and Directors

Table 2.1: Diageo PLC Officers & Directors

Source: Reuters

39

2.1.2 Top 20 Investors

Table 2.2: Diageo PLC Top 20 Investors

Source: Reuters

40

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41

2.1.4 Diageo PLC Consolidated Financial Statements

2.1.4.1 Balance Sheet

Table 2.4: Diageo PLC Consolidated Balance Sheets, 2012 - 2017


42

2.1.4.2 Income Statement

Table 2.5: Diageo PLC Consolidated Income Statements, 2012 - 2017


43

2.1.4.3 Cash Flow Statement

Table 2.6: Diageo PLC Consolidated Statements of Cash Flow, 2012 - 2017

2.2 Market Share Data

2.2.1 Distilled Spirit: Company Market Share

Table 2.7: Global Distilled Spirit Market Share Data – Company Percent Market


Rank Company Name 2011 2012 2013 2014 2015 2016

1 Diageo Plc 4.6 4.7 4.7 9.2 9.3 9.3

2 Pernod Ricard Groupe 4.4 4.4 4.4 4.5 4.7 4.8

3 Hite Jinro Co Ltd 0.0 3.0 2.9 3.1 3.1 3.0

4 Thai Beverage PCL 2.6 2.7 2.7 2.7 2.8 2.7

5 Suntory Holdings Ltd 0.6 0.6 0.6 2.0 2.0 2.0

6 Beijing Shunxin Agriculture Co Ltd 0.7 0.8 1.0 1.2 1.4 1.4


44


Share, by Volume, 2011 – 2016 (Cont.)


7 Alliance Global Group Inc 1.1 1.6 1.4 1.4 1.3 1.4

8 Bacardi & Co Ltd 1.5 1.4 1.4 1.4 1.4 1.4

9 Allied Blenders & Distillers Pvt Ltd 0.7 0.7 1.0 1.3 1.4 1.3

10 Lotte Group 1.1 1.0 1.0 1.1 1.3 1.3

11 San Miguel Corp 0.9 1.2 0.9 0.9 0.9 1.0

12 Russian Standard Corp 0.1 0.1 1.1 1.1 1.0 1.0

13 Sazerac Co Inc 0.6 0.7 0.7 0.8 0.9 1.0

14 Muhak Co Ltd 0.6 0.6 0.7 0.9 1.0 0.9

15 Campari Milano SpA, Davide 0.8 0.8 0.8 0.9 0.9 0.9

16 Luzhou Lao Jiao Co Ltd 0.7 0.9 1.0 0.9 0.9 0.9

17 Brown-Forman Corp 0.9 0.9 0.9 0.9 0.9 0.9

18 Sujiu Group 0.9 0.8 0.8 0.8 0.8 0.8

19 Jing Brand Co Ltd 0.4 0.5 0.6 0.7 0.7 0.7

20 Tanduay Distillers Inc 0.8 0.8 0.6 0.7 0.7 0.6

21 Capital Wine Group Ltd 0.5 0.5 0.6 0.6 0.6 0.6

22 Radico Khaitan Ltd 0.5 0.6 0.6 0.7 0.6 0.6

23 Sichuan Yibin Wuliangye Distillery Co

Ltd 0.5 0.7 0.6 0.5 0.5 0.6

24 Takara Holdings Inc 0.7 0.7 0.6 0.6 0.6 0.6

25 John Distilleries Pvt Ltd 0.5 0.5 0.5 0.5 0.5 0.5

26 Cia Muller de Bebidas Ltda 0.6 0.6 0.5 0.6 0.5 0.5

27 Tatspirtprom OAO 0.2 0.3 0.4 0.3 0.4 0.5

28 Marie Brizard & Roger International SAS - - 0.0 0.0 0.5 0.5

29 Stock Spirits Group 0.6 0.6 0.6 0.6 0.5 0.5

30 Kumbokju Co Ltd 0.5 0.5 0.5 0.5 0.5 0.5

31 Synergya OAO 0.6 0.7 0.6 0.5 0.4 0.5

32 Grupo Cuervo SA de CV 0.3 0.3 0.3 0.3 0.4 0.5

33 Heaven Hill Distilleries Inc 0.3 0.3 0.4 0.4 0.4 0.4

34 William Grant & Sons Ltd 0.4 0.4 0.4 0.4 0.4 0.4

35 Jagatjit Industries Ltd 0.5 0.5 0.5 0.5 0.5 0.4

36 Status Group OOO - - 0.0 0.3 0.7 0.4

37 Sichuan Jian Nan Chun (Group) Co Ltd 0.3 0.3 0.3 0.3 0.4 0.4

38 Asahi Group Holdings Ltd 0.5 0.3 0.3 0.4 0.4 0.4

39 Kirishima Corp 0.4 0.4 0.4 0.4 0.4 0.4

40 La Martiniquaise SVS 0.4 0.4 0.4 0.4 0.4 0.4

41 Constellation Brands Inc 0.3 0.3 0.3 0.3 0.4 0.4

42 Global Spirits AMG-77 Holding Co 0.4 0.4 0.5 0.5 0.4 0.4

43 Sanwa Shurui Co Ltd 0.4 0.4 0.4 0.4 0.4 0.4

44 Nigeria Distilleries Ltd 0.3 0.3 0.3 0.3 0.3 0.3

45 E&J Gallo Winery Inc 0.2 0.2 0.3 0.3 0.3 0.3

46 Oenon Holdings Inc 0.4 0.4 0.3 0.3 0.3 0.3

47 Intercontinental Distillers Ltd 0.2 0.2 0.2 0.3 0.3 0.3

48 Edrington Group 0.3 0.3 0.3 0.3 0.3 0.3

49 Bohae Brewery Co Ltd 0.3 0.3 0.3 0.3 0.3 0.3

50 LVMH Moët Hennessy Louis Vuitton SA 0.2 0.2 0.2 0.2 0.3 0.3

45




51 Anhui Gujing Group Co Ltd 0.2 0.2 0.2 0.3 0.3 0.3

52 Mast-Jägermeister SE 0.3 0.3 0.3 0.3 0.3 0.3

53 Indústrias Reunidas de Bebidas Tatuzinho

/ 3 Fazendas Ltda 0.3 0.3 0.3 0.3 0.3 0.3

54 Anhui Golden Seed Winery Co Ltd 0.3 0.4 0.3 0.3 0.3 0.3

55 Engarrafamento Pitú Ltda 0.3 0.3 0.3 0.3 0.3 0.3

56 Distell Group Ltd 0.3 0.2 0.2 0.2 0.3 0.3

57 Bayadera Holding TOV 0.3 0.3 0.3 0.3 0.3 0.2

58 Distilleries Co of Sri Lanka Plc 0.3 0.3 0.2 0.2 0.2 0.2

59 Shandong JingZhi Distillery Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

60 Shaanxi Xifeng Liquor Co Ltd 0.2 0.2 0.2 0.3 0.2 0.2

61 Mohan Meakin Ltd 0.2 0.2 0.2 0.2 0.2 0.2

62 Rémy Cointreau Group 0.2 0.2 0.2 0.2 0.2 0.2

63 Hebei Hengshui Laobaigan Liquor Co Ltd 0.1 0.1 0.1 0.1 0.2 0.2

64 V V Food & Beverage Co Ltd - - 0.4 0.3 0.3 0.2

65 Daesun Distilling Co Ltd 0.3 0.2 0.2 0.2 0.2 0.2

66 Alkogolnaya Sibirskaya Gruppa OOO 0.3 0.3 0.3 0.2 0.2 0.2

67 Herman Jansen Beverages Nederland BV 0.2 0.2 0.2 0.2 0.2 0.2

68 Guangdong Jiujiang Distillery Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

69 Afsar Co Ltd SP OOO 0.1 0.1 0.1 0.2 0.2 0.2

70 Branca Distillerie Srl, Flli 0.1 0.2 0.2 0.2 0.2 0.2

71 Yantai Changyu Group Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

72 Anhui Yingjia Distillery Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

73 SPI Group 0.2 0.2 0.2 0.2 0.2 0.2

74 Fenjiu Group 0.1 0.2 0.2 0.2 0.2 0.2

75 Amrut Distilleries Pvt Ltd 0.2 0.1 0.2 0.2 0.2 0.2

76 SkyOcean Group Holdings Co Ltd - - - - - 0.2

77 Fifth Generation, Inc 0.0 0.0 0.0 0.1 0.1 0.2

78 Kirin Holdings Co Ltd 0.2 0.2 0.1 0.1 0.1 0.1

79 Sapporo Holdings Ltd 0.1 0.2 0.2 0.1 0.1 0.1

80 Fábrica de Licores y Alcoholes de

Antioquia 0.2 0.2 0.2 0.2 0.1 0.1

81 Indústria de Bebidas Paris Ltda 0.2 0.2 0.1 0.1 0.1 0.1

82 Xinjiang Yilite Industry Co Ltd 0.1 0.1 0.2 0.2 0.1 0.1

83 Nemiroff UVK 0.4 0.3 0.2 0.2 0.2 0.1

84 Kweichow Moutai Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

85 Hanoi Alcohol Beer & Beverages Corp

(Habeco) 0.1 0.1 0.1 0.1 0.1 0.1

86 Kinmen Kaoliang Liquor Inc 0.1 0.1 0.1 0.1 0.1 0.1

87 Satsuma Shuzo Co Ltd 0.2 0.1 0.1 0.1 0.1 0.1

88 GK Kristall-Lefortovo OOO 0.2 0.1 0.2 0.2 0.1 0.1

89 Bashspirt OAO 0.2 0.2 0.2 0.1 0.1 0.1

90 Lang Jiu Group 0.1 0.1 0.1 0.1 0.1 0.1

91 Jiangsu King's Luck Brewery JSC Ltd 0.1 0.1 0.1 0.1 0.1 0.1

92 Oetker-Gruppe 0.1 0.1 0.1 0.1 0.1 0.1

93 Anhui Kouzi Distillery Co Ltd 0.2 0.2 0.2 0.1 0.1 0.1

46




94 Unkai Shuzo Co 0.1 0.1 0.1 0.1 0.1 0.1

95 Anheuser-Busch InBev NV - 0.0 0.0 0.0 0.0 0.1

96 McCormick Distilling Co Inc 0.1 0.1 0.1 0.1 0.1 0.1

97 Luxco Corp 0.1 0.1 0.1 0.1 0.1 0.1

98 Shiva Distilleries Ltd 0.2 0.1 0.1 0.1 0.1 0.1

99 Hamada Syuzou Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

100 Tilaknagar Industries Ltd 0.1 0.1 0.1 0.1 0.1 0.1

101 Caribbean Distillers Corp Ltd (CDC) 0.1 0.1 0.1 0.1 0.1 0.1

102 Farvab JV 0.1 0.1 0.1 0.1 0.1 0.1

103 Berentzen-Gruppe AG 0.1 0.1 0.1 0.1 0.1 0.1

104 Rotkäppchen-Mumm Sektkellereien

GmbH 0.1 0.1 0.1 0.1 0.1 0.1

105 Gräflich von Hardenberg'sche

Kornbrennerei GmbH & Co KG 0.1 0.1 0.1 0.1 0.1 0.1

106 Loch Lomond Distillery Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

107 Minski Zavod Vinogradnyh Vin ZAO 0.0 0.1 0.1 0.1 0.1 0.1

108 Altia Oyj 0.1 0.1 0.1 0.1 0.1 0.1

109 Nikaido Shuzo Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

110 Lucas Bols BV 0.1 0.1 0.1 0.1 0.1 0.1

111 Grupo Osborne SA 0.1 0.1 0.1 0.1 0.1 0.1

112 Farovon OOO PTK 0.1 0.1 0.1 0.1 0.1 0.1

113 Industrias Licoreras de Guatemala SA 0.1 0.1 0.1 0.1 0.1 0.1

114 Minsk Kristall OAO 0.3 0.2 0.2 0.1 0.1 0.1

115 Cooperativa Agrícola Pisquera de Elqui

Ltda 0.1 0.1 0.1 0.1 0.1 0.1

116 De Kuyper Royal Distillers BV 0.1 0.1 0.1 0.1 0.1 0.1

117 Ladoga Kholdingovaya Kompanya ZAO 0.1 0.1 0.1 0.1 0.1 0.1

118 Vinhos Salton SA Indústria e Comércio 0.1 0.1 0.1 0.1 0.1 0.1

119 Krymska Vodochna Kompaniia TOV 0.2 0.2 0.3 0.1 0.1 0.1

120 Olimp Corp 0.1 0.1 0.2 0.1 0.1 0.0

121 Veda ZAO 0.0 0.0 0.0 0.0 0.0 0.0

122 Rosspirtprom FGUP 0.0 0.0 0.0 0.0 0.0 0.0

123 White Rock Distilleries Inc 0.1 0.0 0.0 0.0 0.0 0.0

124 Sichuan Tuopai Shede Wine Co Ltd 0.1 0.2 0.1 0.2 0.1 -

125 SABMiller Plc 0.0 0.1 0.1 0.1 0.1 -

126 Altera Holding 0.1 0.0 0.0 0.0 - -

127 Asahi Breweries Ltd - - - - - -

128 Beam Inc 1.3 1.4 1.4 - - -

129 Beijing Red Star Co Ltd - - - - - -

130 Belvédère SA 0.6 0.6 0.5 0.5 - -

131 Brugal & Co - - - - - -

132 Central European Distribution Corp

(CEDC) 1.2 1.1 - - - -

133 Dialog OOO 0.1 0.0 0.1 0.1 - -

134 Doosan Group - - - - - -

135 Fortune Brands Inc - - - - - -

47




136 Georgievskoe LVZ ZAO 0.0 0.0 0.0 - - -

137 Hite Brewery Co Ltd 2.9 - - - - -

138 Hubei Zhijiang Distillery Co Ltd 0.6 0.4 - - - -

139 Mey Içki San ve Tic AS - - - - - -

140 Omskvinprom OOO - - - - - -

141 Ost Grupa Predpryaty ZAO - - - - - -

142 Overline Concern - - - - - -

143 Parliament Group UK OOO - - - - - -

144 Russkiy Alkohol ZAO - - - - - -

145 Soyuz-Victan TOV - - - - - -

146 UB Group 4.8 4.7 4.8 - - -

147 V&S Vin & Sprit AB - - - - - -

148 Vats Group 0.1 0.1 0.1 0.1 - -

149 Vinexim OOO - - - - - -

150 Ypióca Agroindustrial Ltda 0.2 - - - - -

151 Yupiter Prodakshn OOO 0.1 - - - - -

152 Zavody Gross GK OOO 0.1 - - - - -

153 Zolotaya Manufaktura OOO - 0.2 0.1 - - - Private Label 1.5 1.5 1.4 1.4 1.4 1.3

Others 40.0 39.3 39.4 38.7 37.9 38.1 Total 100.0 100.0 100.0 100.0 100.0 100.0

2.2.2 Distilled Spirit: Brand Market Share

Table 2.8: Global Distilled Spirit Market Share Data – Brand Percent Market

Share, by Volume, 2011 - 2016

Rank Brand Company 2011 2012 2013 2014 2015 2016

1 Chamisul Hite Jinro Co Ltd 0.0 2.8 2.7 2.9 2.8 2.8

2 McDowell's Diageo Plc - - - 2.2 2.2 2.3

3 Ruang Khao Thai Beverage PCL 1.6 1.7 1.6 1.6 1.7 1.7

4 Officer's

Choice

Allied Blenders & Distillers

Pvt Ltd 0.7 0.7 1.0 1.3 1.4 1.3

5 Emperador Alliance Global Group Inc 0.9 1.3 1.4 1.4 1.3 1.3

6 Niulanshan Er

Guo Tou

Beijing Shunxin Agriculture

Co Ltd 0.6 0.7 0.9 1.1 1.2 1.3

7 Smirnoff Diageo Plc 1.1 1.1 1.1 1.1 1.1 1.1

8 Choumchorum Lotte Group 0.9 0.8 0.8 0.9 0.9 1.0

9 San Miguel San Miguel Corp 0.7 0.8 0.7 0.8 0.9 0.9

10 Joeunday Muhak Co Ltd 0.6 0.6 0.7 0.9 0.9 0.9

11 Jing Jiu Jing Brand Co Ltd 0.4 0.5 0.6 0.7 0.7 0.7

12 Imperial Pernod Ricard Groupe 0.3 0.4 0.4 0.5 0.6 0.7

13 Royal Stag Pernod Ricard Groupe 0.5 0.5 0.6 0.6 0.6 0.7


48




14 Bacardi Bacardi & Co Ltd 0.8 0.7 0.7 0.7 0.7 0.7

15 Classic Blue Sujiu Group 0.6 0.5 0.5 0.5 0.6 0.6

16 Red Star Er

Guo Tou Capital Wine Group Ltd 0.5 0.5 0.6 0.6 0.6 0.6

17 Johnnie

Walker Diageo Plc 0.6 0.6 0.6 0.6 0.6 0.6

18 Tanduay Tanduay Distillers Inc 0.7 0.7 0.5 0.6 0.6 0.6

19 Jack Daniel's Brown-Forman Corp 0.4 0.5 0.5 0.5 0.5 0.5

20 Old Tavern Diageo Plc - - - 0.4 0.5 0.5

21 Charm Soju Kumbokju Co Ltd 0.5 0.5 0.5 0.5 0.5 0.5

22 Original

Choice John Distilleries Pvt Ltd 0.5 0.5 0.5 0.5 0.5 0.5

23 Absolut Pernod Ricard Groupe 0.5 0.5 0.5 0.5 0.5 0.5

24 Pirassununga Cia Muller de Bebidas Ltda 0.5 0.5 0.5 0.5 0.5 0.5

25 Captain

Morgan Diageo Plc 0.4 0.4 0.4 0.4 0.4 0.4

26 Bagpiper Diageo Plc - - - 0.4 0.4 0.4

27 Luzhou Lao

Jiao Luzhou Lao Jiao Co Ltd 0.2 0.3 0.4 0.3 0.4 0.4

28 Takara Takara Holdings Inc 0.4 0.4 0.4 0.4 0.4 0.4

29 Hong Thong Thai Beverage PCL 0.4 0.3 0.4 0.4 0.4 0.3

30 Blend 285 Thai Beverage PCL 0.2 0.3 0.3 0.3 0.4 0.3

31 Jian Nan Chun Sichuan Jian Nan Chun

(Group) Co Ltd 0.2 0.2 0.2 0.3 0.3 0.3

32 Kuro

Kirishima Kirishima Corp 0.3 0.3 0.3 0.3 0.3 0.3

33 Iichiko Sanwa Shurui Co Ltd 0.4 0.4 0.3 0.3 0.3 0.3

34 Jim Beam Suntory Holdings Ltd - - - 0.3 0.3 0.3

35 Haywards Diageo Plc - - - 0.3 0.3 0.3

36 Ipsaeju Bohae Brewery Co Ltd 0.3 0.3 0.3 0.3 0.3 0.3

37 Zubrowka Russian Standard Corp - - 0.2 0.2 0.2 0.3

38 Aristocrat Jagatjit Industries Ltd 0.3 0.3 0.4 0.4 0.3 0.3

39 Jägermeister Mast-Jägermeister SE 0.3 0.3 0.3 0.3 0.3 0.3

40 Crown Royal Diageo Plc 0.2 0.2 0.2 0.2 0.2 0.3

41 Pitú Engarrafamento Pitú Ltda 0.3 0.3 0.3 0.3 0.3 0.3

42 Director's

Special Diageo Plc - - - 0.2 0.2 0.3

43 José Cuervo Grupo Cuervo SA de CV 0.2 0.2 0.2 0.2 0.2 0.3

44 Wu Liang

Chun

Sichuan Yibin Wuliangye

Distillery Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

45 Ballantine's Pernod Ricard Groupe 0.2 0.2 0.2 0.2 0.2 0.2

46 Velho Barreiro

Indústrias Reunidas de

Bebidas Tatuzinho / 3

Fazendas Ltda

0.2 0.2 0.2 0.3 0.3 0.2

47 Arrack Distilleries Co of Sri Lanka

Plc 0.3 0.3 0.2 0.2 0.2 0.2

49


Share, by Volume, 2011 - 2016 (Cont.)


48 Baileys Diageo Plc 0.3 0.2 0.2 0.2 0.2 0.2

49 Hennessy LVMH Moët Hennessy Louis

Vuitton SA 0.2 0.2 0.2 0.2 0.2 0.2

50 Ypióca Diageo Plc - 0.2 0.2 0.2 0.2 0.2

51 Jingzhi Baigan Shandong JingZhi Distillery

Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

52 Xifeng Shaanxi Xifeng Liquor Co

Ltd 0.2 0.2 0.2 0.3 0.2 0.2

53 Seaman's

Schnapps Nigeria Distilleries Ltd 0.2 0.2 0.2 0.2 0.2 0.2

54 Blenders Pride Pernod Ricard Groupe 0.2 0.2 0.2 0.2 0.2 0.2

55 Jameson Pernod Ricard Groupe 0.1 0.2 0.2 0.2 0.2 0.2

56 Lao Bai Gan Hebei Hengshui Laobaigan

Liquor Co Ltd 0.1 0.1 0.1 0.1 0.2 0.2

57 Zhijiang V V Food & Beverage Co

Ltd - - 0.4 0.3 0.3 0.2

58 Gordon's Diageo Plc 0.2 0.2 0.2 0.2 0.2 0.2

59 C1 Soju Daesun Distilling Co Ltd 0.3 0.2 0.2 0.2 0.2 0.2

60 Ricard Pernod Ricard Groupe 0.2 0.2 0.2 0.2 0.2 0.2

61 Khortytsa Global Spirits AMG-77

Holding Co 0.3 0.2 0.3 0.3 0.2 0.2

62 Fireball Sazerac Co Inc 0.0 0.0 0.1 0.2 0.2 0.2

63 Jiujiang

Shuang Zheng

Guangdong Jiujiang


64 New

Amsterdam E&J Gallo Winery Inc 0.0 0.1 0.1 0.1 0.2 0.2

65 Svedka Constellation Brands Inc 0.2 0.2 0.2 0.2 0.2 0.2

66 Honeybee Diageo Plc - - - 0.2 0.2 0.2

67 Krupnik Marie Brizard & Roger

International SAS - - - - 0.2 0.2

68 Mansion

House

Herman Jansen Beverages

Nederland BV 0.2 0.2 0.2 0.2 0.2 0.2

69

Chelsea

London Dry

gin

Intercontinental Distillers Ltd 0.1 0.1 0.1 0.2 0.2 0.2

70 Ying Jia Gong

Jiu

Anhui Yingjia Distillery Co

Ltd 0.2 0.2 0.2 0.2 0.2 0.2

71 Changyu Yantai Changyu Group Co

Ltd 0.2 0.2 0.2 0.2 0.2 0.2

72 Grant's William Grant & Sons Ltd 0.2 0.2 0.2 0.2 0.2 0.2

73 Pyat Ozer Alkogolnaya Sibirskaya

Gruppa OOO 0.3 0.3 0.2 0.2 0.2 0.2

74 Havana Club Pernod Ricard Groupe 0.2 0.2 0.2 0.2 0.2 0.2

75 Skyy Vodka Campari Milano SpA, Davide 0.2 0.2 0.2 0.2 0.2 0.2

76 Belenkaya Synergya OAO 0.3 0.3 0.2 0.2 0.1 0.2

77 Chivas Regal Pernod Ricard Groupe 0.2 0.2 0.2 0.2 0.2 0.2

50




78 Tito's Fifth Generation, Inc 0.0 0.0 0.0 0.1 0.1 0.2

79 Fen Jiu Fenjiu Group 0.1 0.2 0.1 0.2 0.2 0.2

80 Sunhari Lotte Group - - - - 0.2 0.2

81 Khlibny Dar Bayadera Holding TOV 0.2 0.2 0.2 0.2 0.2 0.2

82 Dreher Campari Milano SpA, Davide 0.2 0.2 0.1 0.1 0.2 0.1

83 Sauza Tequila Suntory Holdings Ltd - - - 0.1 0.1 0.1

84 Malibu Pernod Ricard Groupe 0.1 0.1 0.1 0.1 0.1 0.1

85 E & J Gallo E&J Gallo Winery Inc 0.1 0.1 0.1 0.1 0.1 0.1

86 8PM Radico Khaitan Ltd 0.2 0.2 0.2 0.2 0.2 0.1

87 William

Lawson Bacardi & Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

88 Jinro Hite Jinro Co Ltd - 0.2 0.2 0.1 0.1 0.1

89 Kanoka Asahi Group Holdings Ltd 0.2 0.1 0.1 0.1 0.1 0.1

90 Kyogetsu

Green Lotte Group 0.2 0.2 0.2 0.2 0.1 0.1

91 Caninha da

Roça

Indústria de Bebidas Paris

Ltda 0.2 0.2 0.1 0.1 0.1 0.1

92 Nemiroff Nemiroff UVK 0.3 0.2 0.2 0.2 0.2 0.1

93 Kakubin Suntory Holdings Ltd 0.1 0.1 0.1 0.1 0.1 0.1

94 Aperol Campari Milano SpA, Davide 0.1 0.1 0.1 0.1 0.1 0.1

95 Fernet Branca Branca Distillerie Srl, Flli 0.1 0.1 0.2 0.1 0.1 0.1

96 Jian Zhuang Sichuan Yibin Wuliangye


97 Campari Campari Milano SpA, Davide 0.1 0.1 0.1 0.1 0.1 0.1

98 Men's Club Diageo Plc - - - 0.2 0.1 0.1

99 Kinmen

Kaoliang Kinmen Kaoliang Liquor Inc 0.1 0.1 0.1 0.1 0.1 0.1

100 J&B Diageo Plc 0.2 0.2 0.1 0.1 0.1 0.1

101 Black Nikka Asahi Group Holdings Ltd 0.1 0.1 0.1 0.1 0.1 0.1

102 Zhongzi Jiu Anhui Golden Seed Winery

Co Ltd 0.1 0.2 0.1 0.1 0.1 0.1

103 Moutai Kweichow Moutai Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

104 Grey Goose Bacardi & Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

105 Burnett's Heaven Hill Distilleries Inc 0.1 0.1 0.1 0.1 0.1 0.1

106 Brugal Edrington Group 0.1 0.1 0.1 0.1 0.1 0.1

107 Bombay

Sapphire Bacardi & Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

108 Gujing Gong Anhui Gujing Group Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

109 William Peel Marie Brizard & Roger

International SAS - - - - 0.1 0.1

110

Magic

Moments

Vodka

Radico Khaitan Ltd 0.1 0.1 0.1 0.1 0.1 0.1

111 Finlandia Brown-Forman Corp 0.1 0.1 0.1 0.1 0.1 0.1

112 Zui San Qiu Anhui Golden Seed Winery

Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

51




113 Beefeater Pernod Ricard Groupe 0.1 0.1 0.1 0.1 0.1 0.1

114 Yeni Raki Diageo Plc 0.2 0.1 0.1 0.1 0.1 0.1

115 Russian

Standard Russian Standard Corp 0.1 0.1 0.1 0.1 0.1 0.1

116 Morosha Global Spirits AMG-77

Holding Co - 0.1 0.1 0.1 0.1 0.1

117 Soplica Russian Standard Corp - - 0.1 0.1 0.1 0.1

118 Tanqueray Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1

119 Famous

Grouse, The Edrington Group 0.1 0.1 0.1 0.1 0.1 0.1

120 Old Admiral

VSOP Brandy Radico Khaitan Ltd 0.1 0.1 0.1 0.1 0.1 0.1

121 Barton Sazerac Co Inc 0.1 0.1 0.1 0.1 0.1 0.1

122 Contessa XXX

Rum Radico Khaitan Ltd 0.1 0.1 0.1 0.1 0.1 0.1

123 Pinnacle Suntory Holdings Ltd - - - 0.1 0.1 0.1

124 Ciroc Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1

125 Label 5 La Martiniquaise SVS 0.1 0.1 0.1 0.1 0.1 0.1

126 Zoladkowa de

Lux Stock Spirits Group 0.2 0.2 0.2 0.2 0.1 0.1

127 Konyagi Anheuser-Busch InBev NV - - - - - 0.1

128 Dewar's Bacardi & Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

129 Old Monk Mohan Meakin Ltd 0.1 0.1 0.1 0.1 0.1 0.1

130 Stolichnaya SPI Group 0.1 0.1 0.1 0.1 0.1 0.1

131 Aguardiente

Antioqueño

Fábrica de Licores y

Alcoholes de Antioquia 0.2 0.2 0.2 0.2 0.1 0.1

132 Satsuma

Shiranami Satsuma Shuzo Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

133 Seagram's Gin Pernod Ricard Groupe 0.1 0.1 0.1 0.1 0.1 0.1

134 Naliboki Minski Zavod Vinogradnyh

Vin ZAO 0.0 0.1 0.1 0.1 0.1 0.1

135 Black Velvet Constellation Brands Inc 0.1 0.1 0.1 0.1 0.1 0.1

136 Zelenaya

Marka Russian Standard Corp - - 0.3 0.2 0.1 0.1

137 Nikaido Nikaido Shuzo Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

138 Wu Liang Ye Sichuan Yibin Wuliangye


139 Sang Som Thai Beverage PCL 0.1 0.1 0.1 0.1 0.1 0.1

140 Seagram's 7

Crown Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1

141 Bell's Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1

142 Dobry Medved Status Group OOO - - 0.0 0.0 0.1 0.1

143 Kristall Minsk Kristall OAO 0.3 0.2 0.2 0.1 0.1 0.1

144 Talka Russian Standard Corp - - 0.1 0.1 0.1 0.1

145 Wyborowa Pernod Ricard Groupe 0.1 0.1 0.1 0.1 0.1 0.1

146 100 Pipers Pernod Ricard Groupe 0.1 0.1 0.1 0.1 0.1 0.1

52




147 Presidente Vinhos Salton SA Indústria e

Comércio 0.1 0.1 0.1 0.1 0.1 0.1

148 Montilla Pernod Ricard Groupe 0.1 0.1 0.1 0.1 0.1 0.1

149 Medoff Krymska Vodochna

Kompaniia TOV 0.1 0.1 0.2 0.1 0.1 0.1

150 Daigoro Asahi Group Holdings Ltd 0.1 0.1 0.1 0.1 0.1 0.1

151 Monitor Shiva Distilleries Ltd 0.1 0.1 0.1 0.1 0.0 0.0

152 Kalina

Krasnaya Status Group OOO - - - - 0.1 0.0

153 Big Man Oenon Holdings Inc 0.1 0.1 0.1 0.1 0.1 0.0

154 Ron Medellín Fábrica de Licores y

Alcoholes de Antioquia 0.0 0.0 0.0 0.0 0.0 0.0

155 Vino Kulafu San Miguel Corp 0.1 0.1 0.0 0.0 0.0 0.0

156 Gran Matador San Miguel Corp 0.1 0.3 0.1 0.1 0.0 0.0

157 Dai Juhyo Suntory Holdings Ltd 0.0 0.0 0.0 0.0 0.0 0.0

158 Generoso Alliance Global Group Inc 0.2 0.3 0.0 0.0 0.0 0.0

159 Russky

Razmer Veda ZAO 0.0 0.0 0.0 0.0 0.0 0.0

160 Absolut V&S Vin & Sprit AB - - - - - -

161 Absolwent Central European

Distribution Corp (CEDC) 0.1 0.0 - - - -

162 Bagpiper UB Group 0.7 0.6 0.5 - - -

163 Brugal Brugal & Co - - - - - -

164 Chamisul

Fresh Hite Brewery Co Ltd 1.6 - - - - -

165 Chamjinisulro Hite Brewery Co Ltd 1.1 - - - - -

166 Choumchorum Doosan Group - - - - - -

167 Daigoro Asahi Breweries Ltd - - - - - -

168 De Kuyper Fortune Brands Inc - - - - - -

169 De Kuyper Beam Inc 0.1 0.1 0.1 - - -

170 Director's

Special UB Group 0.3 0.3 0.3 - - -

171 Gold Riband

Whisky UB Group 0.1 0.1 0.1 - - -

172 Haywards UB Group 0.3 0.3 0.3 - - -

173 Honeybee UB Group 0.2 0.2 0.1 - - -

174 Jim Beam Fortune Brands Inc - - - - - -

175 Jim Beam Beam Inc 0.3 0.3 0.3 - - -

176 Jinliufu Vats Group 0.1 0.1 0.1 0.1 - -

177 Jinro Hite Brewery Co Ltd 0.2 - - - - -

178 Kanoka Asahi Breweries Ltd - - - - - -

179 Konyagi SABMiller Plc - 0.1 0.1 0.1 0.1 -

180 Krupnik Belvédère SA 0.2 0.2 0.2 0.2 - -

181 Kyogetsu

Green Doosan Group - - - - - -

182 McDowell's UB Group 1.9 2.1 2.2 - - -

53




183 Medoff Soyuz-Victan TOV - - - - - -

184 Men's Club UB Group 0.1 0.1 0.2 - - -

185 Muhak White

Soju Muhak Co Ltd - - - - - -

186 Old Tavern UB Group 0.5 0.5 0.5 - - -

187 Parliament Parliament Group UK OOO - - - - - -

188 Parliament Central European


189 Pinnacle Beam Inc - 0.1 0.1 - - -

190 Pinnacle White Rock Distilleries Inc 0.1 - - - - -

191 Putinka Dialog OOO 0.1 0.0 0.1 0.1 - -

192 Putinka Vinexim OOO - - - - - -

193 Pyat Ozer Omskvinprom OOO - - - - - -

194 Red Star Er

Guo Tou Beijing Red Star Co Ltd - - - - - -

195 Sauza Tequila Beam Inc 0.1 0.1 0.1 - - -

196 Sauza Tequila Fortune Brands Inc - - - - - -

197 Slavyanskaya Zavody Gross GK OOO 0.0 - - - - -

198 Southern

Comfort Brown-Forman Corp 0.1 0.1 0.1 0.1 0.1 -

199 Starogardzka Belvédère SA 0.0 0.0 0.0 0.0 - -

200 SV Soyuz-Victan TOV - - - - - -

201 Tuopai Sichuan Tuopai Shede Wine

Co Ltd 0.1 0.1 0.1 0.1 0.1 -

202 William Peel Belvédère SA 0.1 0.1 0.1 0.1 - -

203 Yamskaya Russkiy Alkohol ZAO - - - - - -

204 Yamskaya Central European


205 Yeni Raki Mey Içki San ve Tic AS - - - - - -

206 Ypióca Ypióca Agroindustrial Ltda 0.1 - - - - -

207 Zelenaya

Marka Russkiy Alkohol ZAO - - - - - -

208 Zelenaya

Marka

Central European


209 Zhijiang Hubei Zhijiang Distillery Co

Ltd 0.6 0.4 - - - -

210 Zhuravli Russkiy Alkohol ZAO - - - - - -

211 Zubrowka Central European


Private label Private Label 1.5 1.5 1.4 1.4 1.4 1.3 Others Others 56.9 56.1 55.9 55.1 54.5 54.6 Total Total 100.0 100.0 100.0 100.0 100.0 100.0


54

2.2.3 Beer: Company Market Share

Table 2.9: Global Beer Market Share Data – Company Percent Market Share, by

Volume, 2011 - 2016

Rank Company 2011 2012 2013 2014 2015 2016

1 Anheuser-Busch InBev NV 18.1 18.1 20.0 20.9 21.1 27.4

2 Heineken NV 8.7 9.4 9.3 9.4 9.8 10.1

3 China Resources Holdings Co Ltd - - - - 6.0 6.0

4 Carlsberg A/S 5.6 5.6 6.3 6.1 6.0 6.0

5 Molson Coors Brewing Co 2.6 3.2 3.1 3.0 3.1 4.9

6 Tsingtao Brewery Co Ltd 3.7 4.0 4.4 4.6 4.4 4.1

7 Asahi Group Holdings Ltd 1.3 1.3 1.1 1.1 1.1 3.4

8 Beijing Yanjing Brewery Co Ltd 2.9 2.7 2.9 2.7 2.5 2.2

9 Kirin Holdings Co Ltd 2.5 2.4 2.3 2.2 2.3 2.2

10 Castel Groupe 1.0 1.0 1.1 1.2 1.1 1.1

11 Constellation Brands Inc - - 0.8 0.8 0.9 1.1

12 Diageo Plc 1.0 1.0 1.0 1.0 0.9 1.0

13 San Miguel Corp 0.8 0.8 0.8 0.8 0.9 1.0

14 Cervejaria Petrópolis SA 0.7 0.7 0.8 0.8 0.8 0.8

15 Saigon Alcohol Beer & Beverages Corp

(Sabeco) 0.6 0.6 0.7 0.7 0.7 0.8

16 Anadolu Group 1.1 1.2 1.0 0.9 0.8 0.8

17 Suntory Holdings Ltd 0.8 0.8 0.9 0.9 0.8 0.8

18 UB Group 0.6 0.7 0.7 0.7 0.7 0.7

19 Henan Jinxing Brewery Group 0.9 0.8 0.7 0.6 0.7 0.7

20 Oetker-Gruppe 0.6 0.6 0.6 0.6 0.6 0.7

21 Guangzhou Zhujiang Brewery Co Ltd 0.7 0.6 0.6 0.6 0.6 0.6

22 Empresas Polar CA 0.8 0.8 0.9 0.9 0.8 0.6

23 Grupo Mahou-San Miguel SA 0.5 0.5 0.5 0.5 0.6 0.6

24 Boon Rawd Brewery Co Ltd 0.6 0.6 0.6 0.6 0.5 0.5

25 Blue Ribbon Intermediate Holdings LLC - - - 0.5 0.5 0.5

26 Thai Beverage PCL 0.3 0.4 0.4 0.4 0.4 0.4

27 Sapporo Holdings Ltd 0.4 0.4 0.4 0.4 0.4 0.4

28 Bitburger Braugruppe GmbH 0.4 0.4 0.4 0.4 0.4 0.4

29 Cía Cervecerías Unidas SA 0.4 0.4 0.4 0.4 0.4 0.4

30 Oettinger Brauerei GmbH 0.4 0.4 0.4 0.4 0.4 0.4

31 Hite Jinro Co Ltd - 0.4 0.4 0.3 0.4 0.4

32 Hanoi Alcohol Beer & Beverages Corp

(Habeco) 0.2 0.3 0.3 0.3 0.3 0.3

33 Obolon PAT 0.5 0.5 0.5 0.4 0.3 0.3

34 Krombacher Brauerei Bhd Schadeberg

GmbH & Co KG 0.3 0.3 0.3 0.3 0.3 0.3

35 Damm SA 0.2 0.2 0.2 0.2 0.2 0.2

36 Cia da União de Cervejas de Angola SA - 0.2 0.2 0.2 0.2 0.2

37 Paulaner Brauerei GmbH & Co KG 0.2 0.2 0.2 0.2 0.2 0.2

38 Florida Ice & Farm Co SA 0.1 0.2 0.2 0.2 0.2 0.2

39 Taiwan Tobacco & Liquor Corp 0.2 0.2 0.2 0.2 0.2 0.2

40 Brauerei C & A Veltins GmbH & Co KG 0.2 0.2 0.2 0.2 0.2 0.2

41 Royal Unibrew A/S 0.1 0.1 0.2 0.2 0.2 0.2

55


Volume, 2011 – 2016 (Cont.)

Rank Company 2011 2012 2013 2014 2015 2016

42 Warsteiner Brauerei Haus Cramer GmbH &

Co KG 0.2 0.2 0.2 0.2 0.2 0.2

43 Yuengling Brewery 0.1 0.2 0.1 0.2 0.2 0.2

44 Olvi Oyj 0.2 0.1 0.1 0.2 0.2 0.2

45 Boston Beer Co Inc, The 0.1 0.1 0.2 0.2 0.2 0.2

46 Persha Pryvatna Brovarnya AT 0.0 0.1 0.1 0.1 0.1 0.2

47 Brau Holding International AG 0.2 0.1 0.1 0.1 0.1 0.1

48 Cervecería Centroamericana SA 0.1 0.1 0.1 0.1 0.1 0.1

49 Ochakovo MPBK ZAO 0.1 0.1 0.1 0.1 0.1 0.1

50 Bavaria NV 0.1 0.1 0.1 0.1 0.1 0.1

51 BGI Ethiopia Plc - 0.1 0.1 0.1 0.1 0.1

52 Erdinger Privatbrauerei Weissbräu Werner

Brombach GmbH 0.1 0.1 0.1 0.1 0.1 0.1

53 Karlsberg Brauerei GmbH & Co KG 0.1 0.1 0.1 0.1 0.1 0.1

54 Unicer - Bebidas de Portugal SA 0.1 0.1 0.1 0.1 0.1 0.1

55 Cisneros, Grupo 0.2 0.2 0.1 0.1 0.1 0.1

56 Behnoush Iran Co 0.1 0.1 0.1 0.1 0.1 0.1

57 Asia Brewery Inc 0.2 0.2 0.1 0.1 0.1 0.1

58 SABMiller Plc 9.8 9.6 9.6 9.7 10.1 -

59 Anheuser-Busch Cos Inc - - - - - -

60 Asahi Breweries Ltd - - - - - -

61 Asia Pacific Breweries Ltd 0.4 - - - - -

62 Baltic Beverages Holding AB (BBH) - - - - - -

63 China Resources Enterprise Ltd 5.3 5.4 6.2 6.0 - -

64 Chongqing Brewery Co Ltd 0.6 0.6 - - - -

65 Fomento Económico Mexicano SAB de CV - - - - - -

66 Foster's Group Ltd - - - - - -

67 Grolsch, Koninklijke NV - - - - - -

68 Hite Brewery Co Ltd 0.5 - - - - -

69 InBev NV SA - - - - - -

70 Kingway Brewery Holdings Ltd 0.5 0.4 - - - -

71 Lanzhou Huanghe Beer Co Ltd 0.1 0.1 - - - -

72 León Jimenes Grupo 0.2 - - - - -

73 Lion Nathan Ltd - - - - - -

74 Modelo SA de CV, Grupo 2.9 2.8 - - - -

75 Nantong Fuhao Alcohol Industry Co Ltd 0.2 0.2 0.2 - - -

76 North American Breweries Inc 0.1 - - - - -

77 Oriental Brewery Co Ltd 0.5 0.6 0.6 - - -

78 Pabst Brewing Co 0.5 0.6 0.6 - - -

79 S & P Co - - - - - -

80 Sarmat Group - - - - - -

81 Schincariol Participações e Representações

SA - - - - - -

82 Scottish & Newcastle Plc - - - - - -

83 StarBev Sarl 0.6 - - - - -

56


Volume, 2011 – 2016 (Cont.)

Rank Company 2011 2012 2013 2014 2015 2016

84 Xin Immense Brewery Co Ltd - - - - - - Private Label 0.9 0.9 0.9 0.9 0.9 0.9

Others 15.0 14.5 14.5 14.6 14.1 13.9 Total 100.0 100.0 100.0 100.0 100.0 100.0

2.2.4 Beer: Brand Market Share

Table 2.10: Global Beer Market Share Data: Brand Percent Market Share, by

Volume, 2011 - 2016


1 Snow China Resources Holdings Co

Ltd - - - - 5.4 5.5

2 Budweiser Anheuser-Busch InBev NV 2.0 2.0 2.1 2.2 2.3 2.5

3 Bud Light Anheuser-Busch InBev NV 2.6 2.7 2.6 2.5 2.5 2.4

4 Tsingtao Tsingtao Brewery Co Ltd 2.4 2.5 2.8 2.8 2.6 2.4

5 Skol Anheuser-Busch InBev NV 2.1 2.1 2.0 2.1 2.0 1.9

6 Yanjing Beijing Yanjing Brewery Co

Ltd 1.7 1.7 1.9 1.8 1.7 1.7

7 Heineken Heineken NV 1.5 1.5 1.5 1.5 1.6 1.6

8 Harbin Anheuser-Busch InBev NV 1.1 1.2 1.3 1.3 1.5 1.5

9 Brahma Anheuser-Busch InBev NV 1.5 1.5 1.4 1.5 1.4 1.4

10 Corona Extra Anheuser-Busch InBev NV - - 1.1 1.1 1.1 1.2

11 Coors Light Molson Coors Brewing Co 1.3 1.3 1.3 1.2 1.2 1.2

12 Tecate Heineken NV 0.8 0.8 0.8 0.9 1.0 1.1

13 Miller Lite Molson Coors Brewing Co - - - - - 0.8

14 Tuborg Carlsberg A/S 0.3 0.4 0.4 0.6 0.6 0.7

15 Castle Anheuser-Busch InBev NV - - - - - 0.7

16 Laoshan Tsingtao Brewery Co Ltd 0.4 0.6 0.6 0.8 0.7 0.7

17 Busch Anheuser-Busch InBev NV 0.8 0.7 0.7 0.7 0.7 0.7

18 Antarctica Anheuser-Busch InBev NV 0.8 0.8 0.7 0.8 0.7 0.7

19 Carlsberg Carlsberg A/S 0.6 0.6 0.7 0.7 0.7 0.7

20 Asahi Super

Dry Asahi Group Holdings Ltd 0.7 0.7 0.7 0.7 0.7 0.7

21 Stella Artois Anheuser-Busch InBev NV 0.5 0.5 0.5 0.6 0.6 0.6

22 Red Horse San Miguel Corp 0.4 0.4 0.4 0.5 0.5 0.6

23 Victoria Anheuser-Busch InBev NV - - 0.5 0.5 0.6 0.6

24 Zhujiang Guangzhou Zhujiang

Brewery Co Ltd 0.7 0.6 0.6 0.6 0.6 0.6

25 Baltika Carlsberg A/S 0.9 0.8 0.7 0.7 0.6 0.6

26 Itaipava Cervejaria Petrópolis SA 0.5 0.5 0.5 0.6 0.6 0.6

27 Kingfisher UB Group 0.4 0.4 0.4 0.5 0.5 0.6

28 Polar Empresas Polar CA 0.8 0.8 0.8 0.8 0.8 0.6


57


Volume, 2011 – 2016 (Cont.)


29 Aguila Anheuser-Busch InBev NV - - - - - 0.6

30 Nova Schin Kirin Holdings Co Ltd 0.8 0.9 0.8 0.7 0.6 0.5

31 Corona Extra Constellation Brands Inc - - 0.4 0.5 0.5 0.5

32 Natural Anheuser-Busch InBev NV 0.7 0.7 0.6 0.6 0.6 0.5

33 Carling Black

Label Anheuser-Busch InBev NV - - - - - 0.5

34 Saigon Saigon Alcohol Beer &

Beverages Corp (Sabeco) 0.4 0.4 0.5 0.5 0.5 0.5

35 Cass Anheuser-Busch InBev NV - - - 0.5 0.5 0.5

36 Sedrin Anheuser-Busch InBev NV 0.7 0.6 0.7 0.6 0.6 0.5

37 Pilsen Anheuser-Busch InBev NV 0.0 0.0 0.0 0.0 0.0 0.5

38 Kaiser Heineken NV 0.5 0.5 0.5 0.5 0.5 0.5

39 Poker Anheuser-Busch InBev NV - - - - - 0.5

40 Guinness Diageo Plc 0.5 0.5 0.5 0.4 0.5 0.4

41 Amstel Heineken NV 0.5 0.5 0.5 0.4 0.4 0.4

42 Hans Tsingtao Brewery Co Ltd 0.5 0.4 0.5 0.5 0.5 0.4

43 Pabst Blue Ribbon Intermediate

Holdings LLC - - - 0.4 0.4 0.4

44 Leo Boon Rawd Brewery Co Ltd 0.5 0.5 0.5 0.5 0.4 0.4

45 Modelo Constellation Brands Inc - - 0.2 0.3 0.3 0.4

46 Chang Thai Beverage PCL 0.3 0.3 0.3 0.3 0.3 0.4

47 Carling Molson Coors Brewing Co 0.4 0.4 0.4 0.4 0.4 0.4

48 Xin Immense Tsingtao Brewery Co Ltd 0.2 0.3 0.3 0.4 0.4 0.4

49 Tiger Heineken NV - 0.2 0.2 0.3 0.3 0.4

50 Jin Xing Henan Jinxing Brewery

Group 0.6 0.5 0.5 0.4 0.4 0.4

51 Michelob Ultra Anheuser-Busch InBev NV 0.2 0.2 0.2 0.2 0.3 0.4

52 Hansa Pilsner Anheuser-Busch InBev NV - - - - - 0.4

53 Oettinger Oettinger Brauerei GmbH 0.4 0.4 0.4 0.4 0.4 0.4

54 Beck's Anheuser-Busch InBev NV 0.4 0.4 0.3 0.3 0.4 0.4

55 Kronenbourg Carlsberg A/S 0.3 0.3 0.3 0.3 0.3 0.3

56 Modelo Anheuser-Busch InBev NV - - 0.3 0.3 0.3 0.3

57 Efes Anadolu Group 0.4 0.5 0.4 0.3 0.3 0.3

58 Mahou Grupo Mahou-San Miguel

SA 0.3 0.3 0.3 0.3 0.3 0.3

59 Quilmes Anheuser-Busch InBev NV 0.4 0.4 0.3 0.3 0.3 0.3

60 Krombacher Krombacher Brauerei Bhd

Schadeberg GmbH & Co KG 0.3 0.3 0.3 0.3 0.3 0.3

61 Foster's Heineken NV 0.2 0.3 0.3 0.3 0.3 0.3

62 San Miguel San Miguel Corp 0.3 0.3 0.3 0.3 0.3 0.3

63 Nodogoshi

Nama Kirin Holdings Co Ltd 0.3 0.3 0.3 0.3 0.3 0.3

64 Cristal Anheuser-Busch InBev NV - - - - - 0.3

65 Zubr Asahi Group Holdings Ltd - - - - - 0.3

66 Miller Molson Coors Brewing Co - - - - - 0.3

67 Cruzcampo Heineken NV 0.3 0.3 0.3 0.3 0.3 0.3

58


Volume, 2011 – 2016 (Cont.)


68 Liquan Beijing Yanjing Brewery Co

Ltd 0.6 0.6 0.5 0.4 0.4 0.3

69 Suntory Suntory Holdings Ltd 0.3 0.4 0.4 0.4 0.3 0.3

70 Hanoi Hanoi Alcohol Beer &

Beverages Corp (Habeco) 0.2 0.2 0.2 0.2 0.3 0.3

71 Dos Equis XX Heineken NV 0.1 0.2 0.2 0.2 0.2 0.3

72 Crystal Cervejaria Petrópolis SA 0.2 0.3 0.3 0.3 0.3 0.3

73 333' export Saigon Alcohol Beer &

Beverages Corp (Sabeco) 0.2 0.2 0.2 0.2 0.2 0.2

74 Kinmugi Suntory Holdings Ltd 0.2 0.2 0.2 0.2 0.2 0.2

75 Kirin Tanrei Kirin Holdings Co Ltd 0.3 0.3 0.3 0.3 0.3 0.2

76 Tyskie Asahi Group Holdings Ltd - - - - - 0.2

77 Hite Hite Jinro Co Ltd - 0.3 0.3 0.2 0.2 0.2

78 Cuca Cia da União de Cervejas de

Angola SA - 0.2 0.2 0.2 0.2 0.2

79 Clear Asahi Asahi Group Holdings Ltd 0.2 0.2 0.2 0.2 0.2 0.2

80 Kirin Ichiban

Shibori Kirin Holdings Co Ltd 0.2 0.2 0.2 0.2 0.2 0.2

81 Pilsener Anheuser-Busch InBev NV - - - - - 0.2

82 San Miguel Grupo Mahou-San Miguel

SA 0.2 0.2 0.2 0.2 0.2 0.2

83 Velkopopovick

y Kozel Asahi Group Holdings Ltd - - - - - 0.2

84 Sol Heineken NV 0.2 0.2 0.2 0.2 0.2 0.2

85 Star Heineken NV 0.3 0.3 0.3 0.2 0.2 0.2

86 Angkor Carlsberg A/S 0.1 0.1 0.1 0.2 0.2 0.2

87 Keystone

Light Molson Coors Brewing Co 0.3 0.2 0.2 0.2 0.2 0.2

88 Miller Genuine

Draft Molson Coors Brewing Co - - - - - 0.2

89 Klinskoye Anheuser-Busch InBev NV 0.3 0.3 0.2 0.2 0.2 0.2

90 33 Export Heineken NV 0.2 0.2 0.2 0.2 0.2 0.2

91 Bitburger Bitburger Braugruppe GmbH 0.2 0.2 0.2 0.2 0.2 0.2

92 Blue Sword China Resources Holdings Co

Ltd - - - - 0.2 0.2

93 Bud Ice Anheuser-Busch InBev NV 0.1 0.1 0.1 0.2 0.2 0.2

94 Presidente Anheuser-Busch InBev NV - 0.2 0.2 0.2 0.2 0.2

95 Myanmar Beer Kirin Holdings Co Ltd - - - - 0.2 0.2

96 Bohemia Anheuser-Busch InBev NV 0.1 0.2 0.2 0.2 0.2 0.2

97 Landmark Henan Jinxing Brewery

Group 0.3 0.3 0.3 0.2 0.2 0.2

98 Double Deer Anheuser-Busch InBev NV 0.2 0.2 0.2 0.2 0.2 0.2

99 Jupiler Anheuser-Busch InBev NV 0.2 0.2 0.2 0.2 0.2 0.2

100 Haywards Anheuser-Busch InBev NV - - - - - 0.2

101 Taiwan Taiwan Tobacco & Liquor

Corp 0.2 0.2 0.2 0.2 0.2 0.2

59


Volume, 2011 – 2016 (Cont.)


102 Jinlongquan Anheuser-Busch InBev NV 0.2 0.1 0.2 0.2 0.2 0.2

103 Nanchang

Beer Anheuser-Busch InBev NV - - 0.2 0.2 0.2 0.2

104 Milwaukee's

Best Molson Coors Brewing Co - - - - - 0.2

105 Kingway China Resources Holdings Co

Ltd - - - - 0.2 0.2

106 Bavaria Heineken NV 0.1 0.2 0.2 0.2 0.2 0.2

107 Yuengling Yuengling Brewery 0.1 0.2 0.1 0.2 0.2 0.2

108 Veltins Brauerei C & A Veltins

GmbH & Co KG 0.2 0.2 0.2 0.2 0.2 0.2

109 Harnas Carlsberg A/S 0.1 0.2 0.2 0.2 0.2 0.2

110 Lvivske Carlsberg A/S 0.2 0.3 0.2 0.2 0.2 0.2

111 Chernigivske Anheuser-Busch InBev NV 0.3 0.3 0.3 0.2 0.2 0.2

112 Samuel Adams Boston Beer Co Inc, The 0.1 0.1 0.2 0.2 0.2 0.2

113 Estrella Damm Damm SA 0.1 0.1 0.1 0.1 0.1 0.2

114 Timisoreana Asahi Group Holdings Ltd - - - - - 0.2

115 Warsteiner Warsteiner Brauerei Haus

Cramer GmbH & Co KG 0.2 0.2 0.2 0.2 0.2 0.1

116 Arsenalnoe Carlsberg A/S 0.2 0.2 0.2 0.2 0.1 0.1

117 Pilsner Urquell Asahi Group Holdings Ltd - - - - - 0.1

118 Staropramen Molson Coors Brewing Co - 0.1 0.1 0.1 0.1 0.1

119 Boss Anheuser-Busch InBev NV - - - 0.2 0.2 0.1

120 Castel Castel Groupe 0.1 0.1 0.1 0.1 0.1 0.1

121 Blue Moon Molson Coors Brewing Co 0.1 0.1 0.1 0.1 0.1 0.1

122 Paceña Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

123 Corona Light Anheuser-Busch InBev NV - - 0.1 0.1 0.1 0.1

124 Tatra Heineken NV 0.1 0.2 0.1 0.1 0.1 0.1

125

Suntory The

Premium

Malt's

Suntory Holdings Ltd 0.1 0.1 0.1 0.1 0.1 0.1

126 Holsten Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

127 Warka Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

128 Indio Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

129 Cristal Cía Cervecerías Unidas SA 0.1 0.1 0.1 0.1 0.1 0.1

130 Bavaria Bavaria NV 0.1 0.1 0.1 0.1 0.1 0.1

131 Bely Medved Anadolu Group 0.2 0.2 0.2 0.2 0.1 0.1

132 Hasseröder Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

133 Peroni Asahi Group Holdings Ltd - - - - - 0.1

134 Singha Boon Rawd Brewery Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

135 Labatt Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

136 Zywiec Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

137 Bolshaya

Kruzhka Carlsberg A/S 0.2 0.2 0.1 0.1 0.1 0.1

138 St George BGI Ethiopia Plc - 0.1 0.1 0.1 0.1 0.1

139 Gambrinus Asahi Group Holdings Ltd - - - - - 0.1

60


Volume, 2011 – 2016 (Cont.)


140 Buckler Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

141 Gösser Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

142 Grolsch Asahi Group Holdings Ltd - - - - - 0.1

143 Leffe Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

144 Huiquan Beijing Yanjing Brewery Co

Ltd 0.2 0.2 0.2 0.2 0.1 0.1

145 Knock Out Anheuser-Busch InBev NV - - - - - 0.1

146 Coors Molson Coors Brewing Co 0.1 0.1 0.1 0.1 0.1 0.1

147 Okhota Heineken NV 0.1 0.2 0.2 0.1 0.1 0.1

148 Cusqueña Anheuser-Busch InBev NV - - - - - 0.1

149 Sapporo Black

Label Sapporo Holdings Ltd 0.1 0.1 0.1 0.1 0.1 0.1

150 Paulaner Paulaner Brauerei GmbH &

Co KG 0.1 0.1 0.1 0.1 0.1 0.1

151 Erdinger

Erdinger Privatbrauerei

Weissbräu Werner Brombach

GmbH

0.1 0.1 0.1 0.1 0.1 0.1

152 Obolon Obolon PAT 0.4 0.3 0.2 0.1 0.1 0.1

153 Dali Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

154 Desperados Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

155 Lech Asahi Group Holdings Ltd - - - - - 0.1

156 Gulder Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

157 Escudo Cía Cervecerías Unidas SA 0.1 0.1 0.1 0.1 0.1 0.1

158 Peroni Nastro

Azzurro Asahi Group Holdings Ltd - - - - - 0.1

159 Chopp Brahma Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

160 Sagres Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

161 Radeberger Oetker-Gruppe 0.1 0.1 0.1 0.1 0.1 0.1

162 KK Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

163 Regional Cisneros, Grupo 0.2 0.2 0.1 0.1 0.1 0.1

164 Jelen Molson Coors Brewing Co - 0.1 0.1 0.1 0.1 0.1

165 XXXX Kirin Holdings Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

166 Wusu Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

167 Super Bock Unicer - Bebidas de Portugal

SA 0.1 0.1 0.1 0.1 0.1 0.1

168 Delster Behnoush Iran Co 0.1 0.1 0.1 0.1 0.1 0.1

169 Huda Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

170 Molson

Canadian Molson Coors Brewing Co 0.1 0.1 0.1 0.1 0.1 0.1

171 Zatecky gus Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

172 John Smith's Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

173 Malta

Guinness Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1

174 Kirin Lager Kirin Holdings Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

175 Gold Mine

Beer Anadolu Group 0.2 0.1 0.1 0.1 0.1 0.1

61


Volume, 2011 – 2016 (Cont.)


176 Specjal Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

177 Tri Medvedya Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

178 Shancheng Carlsberg A/S - - 0.4 0.4 0.1 0.1

179 Ochakovo Ochakovo MPBK ZAO 0.1 0.1 0.1 0.1 0.1 0.1

180 Zolotaya

Bochka Anadolu Group - 0.1 0.1 0.1 0.1 0.1

181 Karlsberg Karlsberg Brauerei GmbH &

Co KG 0.1 0.1 0.1 0.1 0.1 0.1

182 Huanghe Carlsberg A/S - - 0.1 0.1 0.1 0.1

183 Toohey's Kirin Holdings Co Ltd 0.1 0.1 0.1 0.1 0.1 0.1

184 Sibirskaya Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

185 Senator Lager Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1

186 Red Rock Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.1

187 Yarpivo Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

188 Stary Melnik Anadolu Group 0.1 0.1 0.1 0.1 0.1 0.1

189 Ciuc Heineken NV 0.1 0.1 0.1 0.1 0.1 0.1

190 Nevskoye Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.1

191 Rogan Anheuser-Busch InBev NV 0.1 0.1 0.1 0.1 0.1 0.0

192 Bochkarov Heineken NV 0.1 0.1 0.1 0.1 0.1 0.0

193 Archa Thai Beverage PCL 0.0 0.0 0.0 0.0 0.0 0.0

194 Tolstyak Anheuser-Busch InBev NV 0.1 0.1 0.1 0.0 0.0 0.0

195 Xin Jiang Carlsberg A/S 0.1 0.1 0.1 0.1 0.1 0.0

196 Bagbier Anheuser-Busch InBev NV 0.1 0.1 0.1 0.0 0.0 0.0

197 Snow Deer Beijing Yanjing Brewery Co

Ltd 0.1 0.1 0.0 0.0 0.0 0.0

198 Jokki Nama Suntory Holdings Ltd 0.0 0.0 0.0 0.0 0.0 0.0

199 Bavaria

Premium Heineken NV 0.0 0.0 0.0 0.0 0.0 0.0

200 Slavutich Carlsberg A/S 0.1 0.1 0.0 0.0 0.0 0.0

201 Aguila SABMiller Plc 0.4 0.4 0.5 0.5 0.5 -

202 Antarctica InBev NV SA - - - - - -

203 Arsenalnoe Baltic Beverages Holding AB

(BBH) - - - - - -

204 Asahi Super

Dry Asahi Breweries Ltd - - - - - -

205 Baltika Baltic Beverages Holding AB

(BBH) - - - - - -

206 Bavaria

Premium

Fomento Económico

Mexicano SAB de CV - - - - - -

207 Beck's InBev NV SA - - - - - -

208 Bergenbier Anheuser-Busch InBev NV - - - - - -

209 Blue Sword China Resources Enterprise

Ltd 0.2 0.2 0.2 0.2 - -

210 Bohemia InBev NV SA - - - - - -

211 Boss Nantong Fuhao Alcohol

Industry Co Ltd 0.2 0.2 0.2 - - -

62


Volume, 2011 – 2016 (Cont.)


212 Brahma InBev NV SA - - - - - -

213 Bud Ice Anheuser-Busch Cos Inc - - - - - -

214 Bud Light Anheuser-Busch Cos Inc - - - - - -

215 Budweiser Anheuser-Busch Cos Inc - - - - - -

216 Busch Anheuser-Busch Cos Inc - - - - - -

217 Carling Black

Label SABMiller Plc 0.5 0.5 0.5 0.5 0.5 -

218 Carta Blanca Fomento Económico


219 Cass InBev NV SA - - - - - -

220 Cass Oriental Brewery Co Ltd 0.4 0.5 0.5 - - -

221 Castle SABMiller Plc 0.5 0.6 0.6 0.7 0.7 -

222 Chernigivske InBev NV SA - - - - - -

223 Clear Asahi Asahi Breweries Ltd - - - - - -

224 Corona Extra Modelo SA de CV, Grupo 1.5 1.5 - - - -

225 Corona Light Modelo SA de CV, Grupo 0.2 0.2 - - - -

226 Costeña SABMiller Plc 0.1 0.1 0.1 0.0 0.0 -

227 Cristal SABMiller Plc 0.3 0.3 0.3 0.3 0.3 -

228 Cusqueña SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

229 Daxue Kirin Holdings Co Ltd - - - - - -

230 Dos Equis XX Fomento Económico


231 Double Deer InBev NV SA - - - - - -

232 Foster's Scottish & Newcastle Plc - - - - - -

233 Gambrinus SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

234 Grolsch SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

235 Grolsch Grolsch, Koninklijke NV - - - - - -

236 Hansa Pilsner SABMiller Plc 0.4 0.4 0.4 0.4 0.4 -

237 Harbin Anheuser-Busch Cos Inc - - - - - -

238 Hasseröder InBev NV SA - - - - - -

239 Haywards SABMiller Plc 0.2 0.2 0.2 0.2 0.2 -

240 Hite Hite Brewery Co Ltd 0.3 - - - - -

241 Huanghe Lanzhou Huanghe Beer Co

Ltd 0.1 0.1 - - - -

242 Icehouse SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

243 Indio Fomento Económico


244 Jelen InBev NV SA - - - - - -

245 Jelen StarBev Sarl 0.1 - - - - -

246 Jelen Anheuser-Busch InBev NV - - - - - -

247 Jinlongquan InBev NV SA - - - - - -

248 John Smith's Scottish & Newcastle Plc - - - - - -

249 Jupiler InBev NV SA - - - - - -

250 Kaiser Fomento Económico


63


Volume, 2011 – 2016 (Cont.)


251 Kingway Kingway Brewery Holdings

Ltd 0.5 0.4 - - - -

252 Kingway China Resources Enterprise

Ltd - - 0.3 0.2 - -

253 KK InBev NV SA - - - - - -

254 Klinskoye InBev NV SA - - - - - -

255 Knock Out SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

256 Kronenbourg Scottish & Newcastle Plc - - - - - -

257 Labatt InBev NV SA - - - - - -

258 Lech SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

259 Michelob Ultra Anheuser-Busch Cos Inc - - - - - -

260 Miller SABMiller Plc 0.4 0.4 0.3 0.3 0.3 -

261 Miller Genuine

Draft SABMiller Plc 0.3 0.3 0.2 0.2 0.2 -

262 Miller Lite SABMiller Plc 0.9 0.9 0.8 0.8 0.8 -

263 Milwaukee's

Best SABMiller Plc 0.2 0.2 0.2 0.2 0.2 -

264 Modelo Modelo SA de CV, Grupo 0.5 0.5 - - - -

265 Nanchang

Beer Asia Brewery Inc 0.2 0.2 - - - -

266 Natural Anheuser-Busch Cos Inc - - - - - -

267 Nevskoe Baltic Beverages Holding AB

(BBH) - - - - - -

268 Nova Schin Schincariol Participações e

Representações SA - - - - - -

269 Old

Milwaukee S & P Co - - - - - -

270 Pabst Pabst Brewing Co 0.4 0.4 0.4 - - -

271 Pabst S & P Co - - - - - -

272 Paceña InBev NV SA - - - - - -

273 Peroni SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

274 Peroni Nastro

Azzurro SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

275 Pilsen SABMiller Plc 0.4 0.4 0.4 0.4 0.4 -

276 Pilsener SABMiller Plc 0.2 0.2 0.3 0.3 0.3 -

277 Pilsner Urquell SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

278 Poker SABMiller Plc 0.4 0.4 0.4 0.4 0.4 -

279 Presidente León Jimenes Grupo 0.1 - - - - -

280 Quilmes InBev NV SA - - - - - -

281 Redd's SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

282 Rogan InBev NV SA - - - - - -

283 Sagres Scottish & Newcastle Plc - - - - - -

284 Sedrin InBev NV SA - - - - - -

285 Shancheng Chongqing Brewery Co Ltd 0.3 0.4 - - - -

286 Shiliang InBev NV SA - - - - - -

287 Sibirskaya InBev NV SA - - - - - -

64


Volume, 2011 – 2016 (Cont.)


288 Skol InBev NV SA - - - - - -

289 Slavutich Baltic Beverages Holding AB

(BBH) - - - - - -

290 Snow China Resources Enterprise

Ltd 4.8 4.9 5.4 5.4 - -

291 Sol Fomento Económico


292 Staropramen InBev NV SA - - - - - -

293 Staropramen Anheuser-Busch InBev NV - - - - - -

294 Staropramen StarBev Sarl 0.1 - - - - -

295 Steel Reserve SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

296 Stella Artois InBev NV SA - - - - - -

297 Superior Fomento Económico


298 Tecate Fomento Económico


299 Tennent's InBev NV SA - - - - - -

300 Tiger Asia Pacific Breweries Ltd 0.1 - - - - -

301 Timisoreana SABMiller Plc 0.2 0.2 0.2 0.1 0.2 -

302 Tolstyak InBev NV SA - - - - - -

303 Toohey's Lion Nathan Ltd - - - - - -

304 Tyskie SABMiller Plc 0.3 0.3 0.3 0.3 0.3 -

305 Uralsky

Master

Baltic Beverages Holding AB

(BBH) - - - - - -

306 Ursus SABMiller Plc 0.1 0.1 0.1 0.0 0.1 -

307 Velkopopovick

y Kozel SABMiller Plc 0.2 0.2 0.2 0.2 0.2 -

308 Victoria Modelo SA de CV, Grupo 0.5 0.5 - - - -

309 Victoria Bitter Foster's Group Ltd - - - - - -

310 Victoria Bitter SABMiller Plc 0.1 0.1 0.1 0.1 0.1 -

311 Xin Immense Xin Immense Brewery Co

Ltd - - - - - -

312 XXXX Lion Nathan Ltd - - - - - -

313 Yantai Asahi Group Holdings Ltd 0.1 0.1 - - - -

314 Yantai Asahi Breweries Ltd - - - - - -

315 Yarpivo Baltic Beverages Holding AB

(BBH) - - - - - -

316 Zolotaya

Bochka SABMiller Plc 0.1 - - - - -

317 Zubr SABMiller Plc 0.2 0.3 0.3 0.3 0.3 - Private label Private Label 0.9 0.9 0.9 0.9 0.9 0.9

Others Others 31.0 30.5 30.6 30.7 30.7 31.4

Total Total 100.0 100.0 100.0 100.0 100.0 100.0


65

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66

2.4 Five Forces Analysis

2.4.1 Threat of New Entrants: High – Opposed to Diageo

On a global scale not as likely, but on a local level, new entrants are

constantly entering the market and competing directly with Diageo’s products, e.g., craft

brewers, craft distillers, etc.

2.4.2 Threat of Substitutes: Very High – Opposed to Diageo

For every product Diageo sells, there are numerous similar products at

various price points. Also, other alcohol beverages are always a possible substitute, e.g.

Cocktail Culture stealing market share from brewers.

2.4.3 Industry Rivalry: Very High – Opposed to Diageo

There are many entities in the industry, vying for marketing space and

market share. For example, Pernod Ricard’s vision is to overtake Diageo and be the

largest distiller in the world.

2.4.4 Bargaining Power of Suppliers: Low – Favorable to Diageo

There are many fragmented suppliers and majority of raw materials are

agricultural commodities taking world market prices (e.g., barley, corn, wheat, etc.).

However, Diageo does enter into long-term contracts to ensure price and quantity

stability, so suppliers do have some limited bargaining power.

2.4.5 Bargaining Power of Customers: Moderate – Favorable to Diageo

Customers are very fragmented, relatively small (most are regional or

smaller entities), and numerous. However, there are many rivals/substitutes competing

for shelf-space, so can easily threaten to take away space.

67

Figure 2.2: Porter’s Five Forces Analysis of Diageo PLC

2.5 Pernod Ricard Financial Statements

2.5.1 Income Statement

Table 2.11: Pernod Ricard Consolidated Income Statements, 2012 - 2017

Source: Team Calculations

Source: Pernod Ricard Annual Reports

68

2.5.2 Balance Sheet

Table 2.12: Pernod Ricard Consolidated Balance Sheets, 2012 - 2017

Source: Pernod Ricard Annual Reports

69

2.6 Financial Statement Analysis

2.6.1 Common Size Analysis


Table 2.13: Common Size Analysis of Diageo PLC’s Income Statements, 2012 –

2017, Compared to Pernod Ricard in 2017

Source: Group Calculations

70


Table 2.14: Common Size Analysis of Diageo PLC’s Balance Sheets, 2012 – 2017,

Compared to Pernod Ricard in 2017


71

2.6.2 Trend Analysis


Table 2.15: Trend Analysis of Diageo PLC’s Income Statements, 2012 - 2017


72


Table 2.16: Trend Analysis of Diageo PLC’s Balance Sheets, 2012 - 2017


73

2.6.3 Growth Analysis


Table 2.17: Growth Analysis of Diageo PLC’s Income Statements, 2012 - 2017


74


Table 2.18: Growth Analysis of Diageo PLC’s Balance Sheets, 2012 - 2017


75

2.7 Key Ratios

2.7.1 Risk Ratios

Table 2.19: Key Risk Ratios of Diageo PLC, 2013 - 2017

2.7.2 Return Ratios

Table 2.20: Key Return Ratios of Diageo PLC, 2013 - 2017



76

2.8 Pro Forma

2.8.1 Pro Forma Assumptions

Table 2.21: Assumptions Used for Creation of Five-Year Pro Forma for Diageo

PLC

2.8.2 Support for Pro Forma Assumptions

Table 2.22: Support for Assumptions Used to Create Five-Year Pro Forma for

Diageo PLC

Variable Notes

Growth Rates

1) 4.2% from analyst consensus as of June 2017 (range

3.1% – 4.8%) – obtained from Diageo’s investor

relations site.

2) 6.4% CAGR 2017 – 2025 – Transparency Market

Research

3) 2.1% CAGR 2016 – 2022 – Allied Market Research,

Alcoholic Beverages Market

(Spirits to grow 2.4%)

4) 0.8% volume growth until 2021 – International Wine &

Spirits Report (IWSR)

5) Management Guidance from FY17 result presentation –

mid-single digit top line growth over the medium term

Source: Group Analysis

77

Table 2.22: Support for Assumptions Used to Create Five-Year Pro Forma for

Diageo PLC (Cont.)

Variable Notes

Global Inflation Forecast

1) 3.3% (2018) IMF

2) 2.9% (2018-9) World Bank Organization

3) 2.1% (2018) OECD

Cost of Goods Sold

2017 = 38.8% of Net Sales, Management Goal to improve

margin by 175 bps from 2017 – 2019 (increased this

guidance by 75 at end of FY17)

Marketing Over last 10 years ranged from 14.25% to 15.79% of Net

Sales, 10 year average is 15.17%

Other Operating

Expenses

Has ranged from 15.38% to 18.54% of Net sales over past 6

years, average is 16.67%

Other Non-Operating

Income

Has ranged from -0.73% to 3.45% of Net Sales over past 6

years, CMS in 2017 was less than 1%

Finance Income

Finance Income is from Hedging Activities and Pension

Fund Assets, as % of Net Sales has ranged from 1.95% to

2.52% over past 6 years, 6 year average is 2.31%

Share of Results of

Assoc. & JV's, net tax

Associates and JV’s are also in the Alcohol Beverage

industry for the most part, so using same assumed growth as

for Net Sales of 2.1% CAGR for overall market

Finance Charges

Based of Leverage policy of 2.5 – 3.0X Net Debt/EBITDA

and managements estimated effective interest rate of 3.5%,

used 3x to be conservative (estimate higher debt cost)

Taxes Statutory Rate in UK 19%, Management expectations for

2018 21%

Discontinued Operations Currently have no assets held for sale on BS, so assuming

no plans to dispose of anything

Non-Controlling

Interests

Used 5 year average of ~4% after removing the one negative

outlier, ranged from 3.49% - 5%

Diluted Shares Assuming same as 2017, though company does have

authority to buy back 251 million

Source: Group Analysis

78

2.8.3 5-Year Pro Forma

Table 2.23: Five-Year Pro Forma for Diageo PLC

2.9 Half-Year Calculations

2.9.1 Historical Full-Year Results

Table 2.24: Key Full-Year Results for Diageo PLC, 2014 - 2017


Source: Diageo Annual Reports & Group Calculations

79

2.9.2 Historical First-Half Results

Table 2.25: First-Half Results for Diageo PLC, 2014 - 2017

2.9.3 First-Half Calculations

Table 2.26: Calculations of the Percentage First-Half EPS and EBITDA Were of

Full-Year Results for Diageo PLC, 2014 - 2015

Source: Diageo Interim Reports & Group Calculations

Source: Diageo Interim Reports

80

Table 2.27: EPS and EBITDA Calculations for Last 12 Months and Next 12

Months Using Historical Averages, Most Recent results and Pro Forma Results.

Source: Diageo Interim Reports & Group Calculations

81

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2.11 Sensitivity Analysis

Figure 2.3: Diageo PLC Share Price Sensitivity Spider Graph

Table 2.29: Diageo PLC Share Price Sensitivity Analysis Looking at Changes in

Assumed Growth Rate and Effective Interest Rate



83

REFERENCES

Allied Market Research [homepage on the internet] Available from:

https://www.alliedmarketresearch.com/

Association of International Certified Professional Accountants - Financial

Management Magazine [homepage on the internet] Available from:

https://www.fm-magazine.com/

Brown-Forman Corporation [homepage on the internet] Available from:

https://www.brown-forman.com/

Cheers Magazine - Business Publication for Full-Service Restaurants and Bars

[homepage on the internet] Available from: http://cheersonline.com/

Constellation Brands, Inc. [homepage on the internet] Available from:

https://www.cbrands.com/

Diageo plc [homepage on the internet] Available from:

https://www.diageo.com/

Euromonitor International – Market Research [homepage on the internet] Available

from: http://www.euromonitor.com/

FocusEconomics - Economic Analysis and Forecasts [homepage on the internet]

Available from: https://www.focus-economics.com/

International Monetary Fund [homepage on the internet] Available from:

http://www.imf.org/

International Wine and Spirit Report – Drinks Market Analysis [homepage on the

internet] Available from: https://www.theiwsr.com/

Kirin Holdings Co, Ltd. [homepage on the internet] Available from:

https://www.kirinholdings.co.jp/

MyDrink Beverages - Beverage Business Consulting Company [homepage on the

internet] Available from: https://www.mydrinkbeverages.com/

84

Organisation for Economic Co-operation and Development [homepage on the internet]

Available from: http://www.oecd.org/

Pernod Ricard SA [homepage on the internet] Available from:

https://www.pernod-ricard.com/

PricewaterhouseCoopers - Professional Services Network [homepage on the internet]

Available from: https://www.pwc.com/

Snipp Interactive Inc. - Global Loyalty and Promotions Company [homepage on the

internet] Available from: http://www.snipp.com/

Spirits Europe [homepage on the internet] Available from:

http://www.spirits.eu/

Thomson Reuters Eikon [homepage on the internet] Available from:

https://financial.thomsonreuters.com/

Transparency Market Research [homepage on the internet] Available from:

https://www.transparencymarketresearch.com/

World Bank Group [homepage on the internet] Available from:

http://www.worldbank.org/

relative valuation of diageo public limited company

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