Guinness swallowed in revamp

DIAGEO is hammering itself into a unified global drinks company - and is downgrading one of its best-known brands, Guinness. In an exercise dubbed One Business One Name, it is axing the GuinnessUDV name from its premium drinks business.

From 1 July, the word Diageo will be used on all its literature and staff contracts. Thousands of trademarks will be moved to Diageo, formed in 1997 by merging Guinness and GrandMet. This demotes the Guinness name, once one of the best-known in the corporate world, merely to a product brand. UDV (United Distillers & Vintners) will disappear.

Diageo denied speculation that downplaying Guinness, brewer of the famous black stout, is a step towards selling it off. But its Pillsbury food business has already gone, Burger King will soon be sold and the emphasis is on bedding in the £5.7bn Seagram drinks acquisition.

Does beer fit with a focused global spirits group, selling drinks such as Johnnie Walker scotch, Smirnoff vodka and Captain Morgan rum? 'It could be said that Guinness is not really that synergistic,' said one analyst. 'It's a speciality beer business. It has not been as effectual in the US as hoped.'

Guinness's global volume sales are slowing, down 1% in the half to December. Nevertheless, international brewers such as Interbrew would love to get their hands on the beer, with its grip on pub distribution in the UK and Ireland, despite never owning a pub chain.

Diageo, up 10 1/2p to 830 1/2p, said the time is right to ditch the GuinnessUDV name. 'We wanted to acknowledge the 3,500 people joining from Seagram just as much as those from Guinness and UDV. They all work for Diageo.' It said the process began two years ago when Diageo decided to exit from food and to merge Guinness brewing with UDV spirits.