October 23, 2008

Diageo Applauds Nebraska Liquor Control Commission’s Decision to Follow Federal Alcohol Regulations

LINCOLN, Neb., Oct. 23 /PRNewswire-FirstCall/ -- Diageo, the world's leading spirits, wine and beer company applauds the Nebraska Liquor Control Commission (NLCC) for adopting a rule that codifies Nebraska's longstanding practice of following federal standards when it comes to classifying beer.

After a public comment period that began on July 31, 2008, the Commission upheld Nebraska's logical classification of flavored malt beverages as beer. Flavored malt beverages, which are malt based and contain the same alcohol as traditional beer, are regulated and taxed as beer in 47 other states across the country. The U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau ("TTB"), the federal agency responsible for regulating alcohol, decided to affirm the longstanding classification of flavored malt beverages as beer in 2005, after an extensive investigation and comment period.

"The Liquor Control Commission's decision to continue regulating flavored malt beverages as beer aligns Nebraska with the Federal Government and nearly every other state," said Winn Atkins, Senior Director of State Government Relations, Diageo North America. "This ruling allows our flavored malt beverages to continue to be sold at a reasonable price and enjoyed responsibly by adult consumers in Nebraska. We do not want to the business of anyone under 21, period."

Some groups in Nebraska, like Project Extra Mile, advocated raising taxes on flavored beer products in a misplaced attempt to reduce underage drinking. Raising taxes on flavored beer, which represents less than 2% of all alcohol beverages sold, will not effectively combat underage drinking.

"As research indicates, and the NLCC recognized today, underage drinking is a problem that needs to be tackled head-on by getting to the source of alcohol to kids: adults," said Atkins. "In fact, according to the Department of Health and Human Services, 90 percent of underage drinkers were either given alcohol for free or had someone else purchase it for them."

"Combating underage drinking requires good parenting, education and penalties for the adults who perpetuate this problem by giving alcohol to kids. Raising taxes is not an effective way to combat underage drinking and would merely punish adult consumers and small businesses that are already struggling in today's uncertain economy," said Atkins.

About Diageo

Diageo (Dee-AH-Gee-O) is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines, and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines.

Diageo is a global company, trading in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). For more information about Diageo, its people, brands, and performance, visit us at Diageo.com. For our global resource that promotes responsible drinking through the sharing of best practice tools, information and initiatives, visit DRINKiQ.com.

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CONTACT: Zsoka McDonald, Diageo, +1-203-229-4730; Rachel Rosenblatt, FD,+1-212-850.5697

Web Site: http://www.diageo.com/