Diageo only sees sustained US recovery by 2011

* Sees uneven recovery in North American market

* Some bounce at luxury end of market in region

LONDON, May 19 (BestGrowthStock) – Diageo Plc (DGE.L: ), the world’s
biggest spirits group, expects sustained recovery in its most
profitable region North America only by 2011, despite signs of a
pickup in spending on some of its higher-priced brands.

“North America is still a bit uneven at the moment and it
will be 2011 before the recovery becomes more sustained,” Ivan
Menezes, head of Diageo’s North American region, told Reuters
during a group investor conference on Wednesday.

The Crown Royal whisky and Captain Morgan rum group earns
around 40 percent of its profits from North America and analysts
say the region is key to Diageo’s recovery prospects.

Menezes added that Diageo was pushing up its marketing by 25
percent in the first six months of 2010 in the $10 billion North
American spirits markets as it anticipates an upturn in demand,
and he has seen “a bit of a bounce” in the luxury area of
Johnnie Walker Blue Label scotch and its champagnes.

Chief Executive Paul Walsh told the conference the group,
which also makes Smirnoff vodka and Guinness beer, was seeing
good growth in developing markets — which make up 32 percent of
sales — while he saw more fragile growth in developed markets.

He said the group had recorded annual growth of 10 percent
or above from developing markets over the last five years, while
he was more optimistic of recovery in North America than in
Europe, which he expects to remain tough, especially in southern
European economies such as Greece and Spain.

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(Reporting by David Jones, editing by Will Waterman)

Diageo only sees sustained US recovery by 2011