Caribbean to help enable people to find employment. Many Diageo brands also helped drive awareness and support for its community programmes. In the year ended 30 June 2010, Buchanan’s launched its third annual fundraiser campaign ‘Buchanan’s Forever’ to contribute to Diageo’s Learning for Life programme and Guinness established the Arthur Guinness Fund as part of the Guinness ‘250 th Celebrations’. The Arthur Guinness Fund has pledged support to social entrepreneurs to help contribute to local economic development across Ireland, Africa, Asia, Great Britain and North America. In addition to global initiatives, Diageo supports involvement by its employees to benefit local communities and takes proactive measures to react rapidly to natural disasters affecting communities in the markets in which it operates, most recently delivering food, water and emergency supplies to victims of the earthquake in Haiti. Through the employee giving programme Giving for Good, Diageo employees raised enough money to donate 3,500 water filter kits to schools and health clinics in Uganda. 20
Business description (continued) Competition Diageo competes on the basis of consumer loyalty, quality and price. In spirits, Diageo’s major global competitors are Pernod Ricard, Bacardi, Fortune Brands and Brown-Forman, each of which has several brands that compete directly with Diageo brands. In addition, Diageo faces competition from local and regional companies in the countries in which it operates. In beer, the Guinness brand competes globally as well as on a regional and local basis (with the profile varying between regions) with several competitors, including AB InBev, Heineken, SABMiller, Coors Brewing (Carling) and Carlsberg. In wine, the market is fragmented with many producers and distributors. Research and development The overall nature of the group’s business does not demand substantial expenditure on research and development. However, the group has ongoing programmes for developing new drinks products. Innovation forms an important part of Diageo’s growth strategy, playing a key role in positioning its brands for continued growth. The strength and depth of Diageo’s brand range provide solid platforms from which to drive innovation, while insights into shopper trends and changing consumer habits inform product and packaging development. In the year ended 30 June 2010, the group’s research and development expenditure amounted to £13 million (2009 – £17 million; 2008 – £17 million). Research and development expenditure is generally written off in the year in which it is incurred. Trademarks Diageo produces and distributes branded goods and is therefore substantially dependent on the maintenance and protection of its trademarks. All brand names mentioned in this document are trademarks. The group also holds numerous licences and trade secrets, as well as having substantial trade knowledge related to its products. The group believes that its significant trademarks are
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