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SEC investigating Diageo PLC (owner of Smirnoff, Johnnie Walker, Baileys, Guinness)

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XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
http://www.wsj.com/articles/sec-investigating-smirnoff-maker-diageo-1437678975

The Securities and Exchange Commission is investigating whether Diageo PLC has been shipping excess inventory to distributors in an effort to boost the liquor company’s results, according to people familiar with the inquiry.

By sending more cases to distributors than wanted, the British-based owner of Smirnoff and Johnnie Walker would be able to report increased sales and shipments, according to these people.

Diageo confirmed Thursday to The Wall Street Journal that it received an inquiry from the SEC regarding its distribution in the U.S.

“Diageo is working to respond fully to the SEC’s requests for information in this matter,” a company spokeswoman said.

Diageo’s American depositary receipts fell 5% Thursday afternoon, following the Journal’s report on the inquiry, and ended the day down $4.99, or 4.2%, to $114.67.

The inquiry coincides with a period of tumult in Diageo’s executive ranks. The company announced in June that North American President Larry Schwartz would be retiring by the end of the year. Since then, the company has also announced the departures of its chief marketing officer for North America and a president of national accounts in the U.S.
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In the U.S., liquor producers follow a three-tier system to market. Producers like Diageo ship to wholesalers, who then ship to retailers. Liquor companies can record shipments as sales when they ship them to the wholesaler.

Diageo Chief Executive Ivan Menezes said during a call with analysts in January that the company has shifted its focus from shipments, which reflect sales to distributors, to depletions, which reflect sales by distributors to retailers. He said the company was reducing the level of inventory distributors carry to get “better visibility on customer depletions.”

Pernod-Ricard, the world’s second-largest publicly traded liquor company, emphasizes depletions during earnings reports and uses that as a benchmark for performance. Brown-Forman Corp. , the largest publicly traded U.S. spirits company, measures its volume performance with depletions.

Diageo has about a 20% share of the U.S. spirits market, according to the industry tracking service Impact Databank. It became the market leader after Mr. Menezes’s predecessor, Paul Walsh, exited businesses like Burger King and Pillsbury and focused on alcohol, scooping up Seagram Co. brands Captain Morgan and Crown Royal in a $5 billion deal.
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The full list of products in Diageo's line:

Beer: Guinness, Tusker, Smithwick's, Red Stripe, Harp Lager, Kilkenny, Kaliber (non-alcoholic), Windhoek
Scotch whisky: Johnnie Walker, Buchanan's, Cardhu, Justerini & Brooks (J&B), Bell's, Black & White, White Horse, Logan, Caol Ila, Vat 69, Oban, Talisker, Lagavulin, Glen Ord, Glenkinchie, Dalwhinnie, Cragganmore, Clynelish, Singleton, Haig, Royal Lochnagar, Glen Elgin, Knockando, The Dimple Pinch
Vodka: Smirnoff, Cîroc, Silent Sam, Popov, Ketel One
Gin: Gordon's, Tanqueray, Booth's, Nolet's Gin
Rum: Captain Morgan, Bundaberg, Pampero, Cacique, Myers's, Zacapa
Bourbon: Bulleit, Orphan Barrel
American Whiskey: Seagram's Seven Crown
Canadian whisky: Crown Royal, Seagram's VO
Tennessee whiskey: George Dickel
Tequila: Don Julio, Peligroso, DeLeón
Schnapps: Black Haus, Rumple Minze
Baijiu: Shui Jing Fang
Mixed drinks: Archers, Pimm's, Jeremiah Weed, Smirnoff Cocktails
Liqueur: Baileys, Sheridans, Yukon Jack, Godiva
Wines: Sterling Vineyards, Beaulieu Vineyard, Chalone, Piat d'Or, Blossom Hill, Canoe Ridge Vineyard, Acacia, Moon Mountain, Dynamite, Provenance Vineyards, Hewitt Vineyard, Rosenblum and Navarro Correas.

Diageo also distributes Unicum (Hungarian liqueur), its lighter-bodied variant Zwack, and Grand Marnier which is distributed by Diageo in many markets, including exclusively in Canada, and a deal was reached in 2009 to expand significantly this partnership in Europe.
 
K

komplanen

Member
I remember a time when Baileys and Smirnoff were legit popular. Nowadays people only drink smaller hipster crap that I bet I haven't even heard of.
 
B

butzopower

proud of his butz
komplanen said:
I remember a time when Baileys and Smirnoff were legit popular. Nowadays people only drink smaller hipster crap that I bet I haven't even heard of.
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This is like saying people used to drink Mountain Dew, but now everyone drinks fresh squeezed juice from lord only knows.
 
S

Stinkles

Clothed, sober, cooperative
sangreal said:
didn't even know channel stuffing was against the rules. Someone should tell the vidya game companies
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Liquor stores don't have to bet their success against a single launch week. Overestimating demand is not channel stuffing and is actually a really bad idea, fiscally, since returns and unsold inventory come back to haunt you immediately.
 
X

XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
Salmonax said:
Noooo... they be stealin' my Bulleit!
Click to expand...

The full list of products in Diageo's line, also added to the OP:

Beer: Guinness, Tusker, Smithwick's, Red Stripe, Harp Lager, Kilkenny, Kaliber (non-alcoholic), Windhoek
Scotch whisky: Johnnie Walker, Buchanan's, Cardhu, Justerini & Brooks (J&B), Bell's, Black & White, White Horse, Logan, Caol Ila, Vat 69, Oban, Talisker, Lagavulin, Glen Ord, Glenkinchie, Dalwhinnie, Cragganmore, Clynelish, Singleton, Haig, Royal Lochnagar, Glen Elgin, Knockando, The Dimple Pinch
Vodka: Smirnoff, Cîroc, Silent Sam, Popov, Ketel One
Gin: Gordon's, Tanqueray, Booth's, Nolet's Gin
Rum: Captain Morgan, Bundaberg, Pampero, Cacique, Myers's, Zacapa
Bourbon: Bulleit, Orphan Barrel
American Whiskey: Seagram's Seven Crown
Canadian whisky: Crown Royal, Seagram's VO
Tennessee whiskey: George Dickel
Tequila: Don Julio, Peligroso, DeLeón
Schnapps: Black Haus, Rumple Minze
Baijiu: Shui Jing Fang
Mixed drinks: Archers, Pimm's, Jeremiah Weed, Smirnoff Cocktails
Liqueur: Baileys, Sheridans, Yukon Jack, Godiva
Wines: Sterling Vineyards, Beaulieu Vineyard, Chalone, Piat d'Or, Blossom Hill, Canoe Ridge Vineyard, Acacia, Moon Mountain, Dynamite, Provenance Vineyards, Hewitt Vineyard, Rosenblum and Navarro Correas.

Diageo also distributes Unicum (Hungarian liqueur), its lighter-bodied variant Zwack, and Grand Marnier which is distributed by Diageo in many markets, including exclusively in Canada, and a deal was reached in 2009 to expand significantly this partnership in Europe.
 
S

soleil

Banned
XiaNaphryz said:
The full list of products in Diageo's line, also added to the OP:

Beer: Guinness, Tusker, Smithwick's, Red Stripe, Harp Lager, Kilkenny, Kaliber (non-alcoholic), Windhoek
Scotch whisky: Johnnie Walker, Buchanan's, Cardhu, Justerini & Brooks (J&B), Bell's, Black & White, White Horse, Logan, Caol Ila, Vat 69, Oban, Talisker, Lagavulin, Glen Ord, Glenkinchie, Dalwhinnie, Cragganmore, Clynelish, Singleton, Haig, Royal Lochnagar, Glen Elgin, Knockando, The Dimple Pinch
Vodka: Smirnoff, Cîroc, Silent Sam, Popov, Ketel One
Gin: Gordon's, Tanqueray, Booth's, Nolet's Gin
Rum: Captain Morgan, Bundaberg, Pampero, Cacique, Myers's, Zacapa
Bourbon: Bulleit, Orphan Barrel
American Whiskey: Seagram's Seven Crown
Canadian whisky: Crown Royal, Seagram's VO
Tennessee whiskey: George Dickel
Tequila: Don Julio, Peligroso, DeLeón
Schnapps: Black Haus, Rumple Minze
Baijiu: Shui Jing Fang
Mixed drinks: Archers, Pimm's, Jeremiah Weed, Smirnoff Cocktails
Liqueur: Baileys, Sheridans, Yukon Jack, Godiva
Wines: Sterling Vineyards, Beaulieu Vineyard, Chalone, Piat d'Or, Blossom Hill, Canoe Ridge Vineyard, Acacia, Moon Mountain, Dynamite, Provenance Vineyards, Hewitt Vineyard, Rosenblum and Navarro Correas.

Diageo also distributes Unicum (Hungarian liqueur), its lighter-bodied variant Zwack, and Grand Marnier which is distributed by Diageo in many markets, including exclusively in Canada, and a deal was reached in 2009 to expand significantly this partnership in Europe.
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The first thing I thought when I read the title was "Oh shit. They better leave Lagavulin alone."
 
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