It is possible that the pursuit of this strategic

It is possible that the pursuit of this strategic focus on premium drinks could give rise to further
business combinations, acquisitions, disposals, joint ventures and/or partnerships (including any
associated financing or the assumption of actual or potential liabilities, depending on the transaction
contemplated). There can be no assurance that any transaction will be completed. The success of any
transaction will depend in part on Diageo’s ability to successfully integrate new businesses with
Diageo’s existing operations and realise the anticipated benefits, cost savings or synergies. There can be
no guarantee that any such business combination, acquisition, disposal, joint venture or partnership
would deliver the benefits, cost savings or synergies anticipated, if any.
Similarly, there can be no assurance that the cost-saving or restructuring programmes implemented
by Diageo in order to improve efficiencies and deliver cost-savings will deliver the expected benefits.
Regulatory decisions and changes in the legal and regulatory environment could increase Diageo’s
costs and liabilities or limit its business activities Diageo’s operations are subject to extensive
regulatory requirements which include those in respect of production, product liability, distribution,
importation, marketing, promotion, sales, pricing, labelling, packaging, advertising, labour, pensions,
compliance and control systems, and environmental issues. Changes in laws, regulations or
governmental or regulatory policies and/or practices could cause Diageo to incur material additional
costs or liabilities that could adversely affect its business. In particular, governmental bodies in
countries where Diageo operates may impose new labelling, product or production requirements,
limitations on the advertising and/or promotion activities used to market beverage alcohol, restrictions
on retail outlets, other restrictions on marketing, promotion and distribution or other restrictions on
the locations or occasions where beverage alcohol is sold which directly or indirectly limit the sales of
Diageo products. Regulatory authorities under whose laws Diageo operates may also have enforcement
power that can subject the group to actions such as product recall, seizure of products or other
sanctions, which could have an adverse effect on its sales or damage its reputation. An increase in the
stringency of the regulatory environment could cause Diageo to incur material additional costs or
liabilities that could adversely affect its business.
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Business description (continued)
In addition, beverage alcohol products are the subject of national excise and other duties in most
countries around the world. An increase in excise or other duties could have a significant adverse effect
on Diageo’s sales revenue or margin, both through reducing overall consumption and by encouraging
consumers to switch to lower-taxed categories of beverage alcohol.