Diageo CEO stands by tax warning

Finding growth in European business
Finding growth in European business

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Finding growth in European business 02:24

Story highlights

  • The Diageo CEO doesn't regret his comments over the UK's tax rate for higher earners
  • Paul Walsh reportedly said the rate for high earners would do long-term damage
  • Diageo is focusing on the high-end market to fuel growth
The CEO of drinks giant Diageo, Paul Walsh, says he does not regret his controversial comments over the UK's tax rate for higher earners.
Late last year it was widely reported in British media that the head of the spirits brand warned the UK's 50% income tax rate for high earners would do long-term damage to the local economy.
"There's a big difference between giving more than you earn to the government around the whole psychology of tax structures," Walsh said. "Fortunately I don't have to sell it, it's just my opinion."
Diageo trades in around 180 markets across the world, employing more than 20,000 people. With 30% of its business stemming from Europe, the company is closely looking at the currently challenging market. "We still have to find a way to grow and there are pockets of growth in Europe," Walsh said.
Diageo is focusing on the high-end market to fuel this growth. Walsh points to Greece where even in the troubled economy the company's premium products portfolio is still performing well.
"You still have this bifurcation between those who have disposable income and those who do not," Walsh explained. "For those who have, our products are very attractive items." He said Diageo is increasingly investing more behind its higher value added products, such as Johnny Walker Blue.
"We will let the mainstream progressively go to other players," Walsh added. "We are a premium player and therefore we don't really have low-end brands." He believes this is one of the reasons the company has been recession resistant.
For the last decade the company has been devoting more of its business to developing markets in Asia, Africa and Latin America but Walsh insists Europe is still important to Diageo. "We do not give up on Europe," he said.