Skip to main content
Part of complete coverage on

Diageo: Europe must be more competitive

By CNN Wire staff
February 7, 2013 -- Updated 1839 GMT (0239 HKT)
STORY HIGHLIGHTS
  • Diageo posted a 5% rise in sales growth for the second half of last year
  • Recent acquisitions for Diageo have included ShuiJingFang, a maker of baijiu
  • London-based Diageo won't be putting any pro-Europe stickers on their bottles

(CNN) -- Europe needs to cut back on its red tape and be more competitive if it is to succeed on a global stage, according to Diageo's chief executive.

Paul Walsh, boss of the world's largest spirits producer, told CNN: "We have to have less regulation and more focus on a competitive edge. Europe is becoming less competitive in the global scene."

Read more: Carlsberg's sustainability drive pays off

Britain also needs to reforge its relationship with the European Union, he added. However, this should not necessarily be thrashed out through an "in-or-out" referendum as proposed by British Prime Minister David Cameron.

"As a businessman I would have preferred a much more authoritarian approach," he joked, "but I suspect that politicians are deprived of that ability."

Read more: Shipping giant looks to China to combat downturn

He added: "I think we should do everything in our power to stay in the EU, and that means inevitably some kind of compromise."

Diageo posted a 5% rise in sales growth for the second half of last year, despite a decline in European sales. Southern Europe was particularly hard hit, suffering a 19% fall in sales as the financial crisis continued to bite.

Read more: Kerry CEO: Ireland as Europe's 'gateway'

"Europe continues to become a smaller piece of the overall pie," said Walsh, who is focusing on faster growth markets, such as Latin America, Africa and Asia.

Recent acquisitions for London-based Diageo have included ShuiJingFang, a maker of baijiu, a Chinese white spirit, as well as Mey Icki, in Turkey. Diageo is in the process of acquiring a majority stake in United Spirits, India's largest spirits company.

Read more: Could emerging markets be Lindt's new sweet spot?

Growth in these emerging markets is offsetting declines in Europe, but Diageo's home markets are still vital.

"We have to do a far better job in educating our population on the imperative of staying in Europe," said Walsh. "I don't believe that task should just be left to the politicians, business too have to stand up."

Diageo won't be putting any pro-Europe stickers on their bottles; Walsh believes the educating should start within the business itself.

"We need to engage first and foremost with our employees," Walsh said. He added the company should "explain to them that many of these brands enjoy their place in the global marketplace because of free trade agreements that are configured via Europe."

CNN's Anna Stewart contributed to this article

ADVERTISEMENT
Part of complete coverage on
Marketplace Europe
January 16, 2014 -- Updated 1631 GMT (0031 HKT)
Marketplace Europe visits Latvia to see how the Baltic country has made its transition to the Euro from the Lat.
January 16, 2014 -- Updated 1630 GMT (0030 HKT)
CNN's Nina Dos Santos visits Latvia to speak to the country's outgoing Prime Minister and the prospects for the eurozone's 18th member.
January 2, 2014 -- Updated 1640 GMT (0040 HKT)
Malta is the gateway to Europe and on the frontline of the immigration flows. Isa Soares reports from a detention center on the Mediterranean island.
January 2, 2014 -- Updated 1641 GMT (0041 HKT)
CNN's Isa Soares speaks with people on the streets of Valletta who say their country can't cope with more migrants from Africa and the Middle East.
January 9, 2014 -- Updated 1006 GMT (1806 HKT)
Malta cannot afford to continue supporting migrants from war-torn countries in its over-crowded detention camps, the country's foreign minister has told CNN.
December 26, 2013 -- Updated 2123 GMT (0523 HKT)
Slow recoveries, bailouts, and youth unemployment. Richard Quest speaks to Europe's top CEOs about the issues of 2013.
December 26, 2013 -- Updated 2114 GMT (0514 HKT)
CNN's Richard Quest speaks to economist Bob Parker about defining moments of 2013 and about what to expect in 2014.
December 5, 2013 -- Updated 1815 GMT (0215 HKT)
Estonia is setting the pace for other European nations with a thriving economy and its tech industry, according to the Baltic nation's leader.
December 5, 2013 -- Updated 1903 GMT (0303 HKT)
The Baltic nation of Estonia is developing its oil shale energy reserves in a bid to become energy self-sufficient.
November 29, 2013 -- Updated 0925 GMT (1725 HKT)
Europe must stop being nationalistic if it wants to help a lost generation of workers, the regional boss of U.S. conglomerate General Electric says.
November 14, 2013 -- Updated 1706 GMT (0106 HKT)
Peer at the windows and you'll spot big colorful chairs, plastic plants and a huge bed, but this is no department store.
November 19, 2013 -- Updated 1006 GMT (1806 HKT)
There once was a time, many years ago, when the sounds of bagpipes struck fear into the stomachs of Englishmen.
November 11, 2013 -- Updated 1116 GMT (1916 HKT)
Greece is on the way to economic recovery as investor faith returns to the recession-ridden eurozone nation, an executive at Greece's largest bank has told CNN.
November 8, 2013 -- Updated 1200 GMT (2000 HKT)
Could Greece's famous spice help the country's farmers through a four-year long economic crisis.
November 1, 2013 -- Updated 1307 GMT (2107 HKT)
One of the masterminds behind the euro says Europe would have suffered a far worse fate if the single currency had never been created.
October 31, 2013 -- Updated 1741 GMT (0141 HKT)
Nina Dos Santos visits the Dutch city where the European treaty carrying the city's name came into force 20 years ago.
October 25, 2013 -- Updated 1510 GMT (2310 HKT)
As Spain continues its drive to slash budgets and cut spending, one of the nation's favorite pastimes is under threat as ministers look for ways to boost productivity.
October 24, 2013 -- Updated 1617 GMT (0017 HKT)
The high commissioner of Brand Spain talks about getting the country back on its fee and attracting business.
ADVERTISEMENT