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Diageo spends £100m on supply chain restructure

Diageo is spending £100 million on restructuring its global supply chain, which will eventually save the drinks group £60m a year.

Diageo is streamlining its drinks portfolio’s supply network

As a result of “increasing presence in faster growing markets”, Diageo will refocus its global supply and procurement chain to allow a seamless alignment throughout its 21 key markets.

The group estimates the cost of restructuring to be around £100m. However it claims an initial review has shown that after three years, the changes – alongside other cost and footprint changes – can save in the region of £60m per year.

“Responsibility for local operations will be transferred to the markets and regional structures will be reduced,” the group said in a statement issued today. “The global supply organisation will continue to be responsible for ensuring excellence across all operations. This change follows the reshaping of the in-market organisations through the implementation of the 2011 operating model review.”

Diageo is due to deliver its 2013 end-of-year financial results on 30 June. Due to separate changes made to management responsibilities, the financial results will be reported using the following geographical segments: North America; Western Europe, Africa, Eastern Europe and Turkey, Latin America and Caribbean, Asia Pacific and Corporate.

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