Diageo targets China and India in management shake-up

Diageo, the London-based owner of Johnnie Walker scotch and Smirnoff vodka, has shaken up its management team in a move that underscores its ambitions in emerging markets and lays down a marker by chief executive Ivan Menezes.

Mr Menezes, who has been in the post for less than a year, said on Friday that China and India were "key growth engines" for the group and entrusted their development to a dedicated manager.

He appointed Gilbert Ghostine, head of Asia Pacific since 2009, to the role of president Diageo India and Greater China, and chief corporate development officer.

Mr Ghostine will also have responsibility for Moet-Hennessy, the upmarket cognac and champagne business owned by LVMH and in which Diageo has a 34 per cent stake.

The role builds on the relationship established by Mr Ghostine with the luxury goods group from his days managing continental Europe. Moet Hennessy also distributes some Diageo drinks in China.

Paul Walsh, chief executive until Mr Menezes took over last July, made a number of acquisitions in his 12 years at the helm. Though Mr Menezes is also interested in bolt-on acquisitions, he has put the accent on integration and execution of these businesses.

"Over the last few years the scale and shape of our business in Asia-Pacific has transformed, primarily by the acquisitions we have made in India and greater China," said Mr Menezes. He said the management changes "focus on growth".

Mr Ghostine will face challenges in both markets. In India, seen as a potentially huge whisky market, Diageo's ambition to own a majority stake in United Spirits of India, owned by troubled tycoon Vijay Mallya, has been held back by legal challenges and regulatory issues.

In China, where Diageo took majority control of Shui Jing Fang, a premium baijiu (white spirits) company last year, the group has faced an economic slowdown and a government clampdown on extravagant hospitality which has also hit other international spirits groups, including Pernod Ricard and Remy Cointreau.

In further management changes in emerging markets Nick Blazquez will be responsible for north Asia, southeast Asia, Australia and global travel and the Middle East, in addition to his existing role as head of Africa, Turkey, Russia and eastern Europe.

Deirdre Mahlan, finance director, will also be given the additional role of overseeing global supply and procurement.

The changes will come into effect on July 1.

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