While Diageo has stated time and again that they want to concentrate only on the P&A segment, i still wonder how the popular segment has almost NO GROWTH. This is India for heavens sake!
That being their intention, I don’t see reason in celebrating a larger share of revenue coming from the P&A. When one segment is encouraged and the other is thwarted, it is but natural to end up with a 65% contribution from the P&A segment.
If they really don’t want to be in the Popular segment, why own the brands at all ? Why cant they simply sell them ? It should definitely increase management bandwidth.
One rumour tells me that they don’t want to sell the brands as smaller companies who buy these brands can get much stronger and then even start competing with them in the Prestige segment. I wonder if Diageo, with such massive ad budgets can be so insecure.
Another rumour i heard is that Diageo has stopped paying bribes to politicians and other crony capitalists. What they do now instead, is lease out their shitty brands at a subsidised cost and give them higher margins instead. Thus giving Diageo its high corporate governance image as well as indirectly bribing in WHITE money.
While i love the company, their products and their amazing branding, i really think they should have enough growth to justify their valuations and having a clean image to impress mommy is just not going to cut it.
When Sin Stocks want the respect of FMCG companies it is a cause for concern.
A simple indicator is not how many times you file lawsuits for justice, but it’s how many cases are against you.
A target of double digit revenue growth in a country like India, is nothing phenomenal ! Diageo needs so put aside its whisky shots and get some entrepreneurial spirit in its blood stream.
Waiting for the launch of the Pre-Mix portfolio.
“Zarra jaldi karo!”
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