UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
10 May
2017
Commission File Number: 001-10691
DIAGEO plc
(Translation
of registrant’s name into English)
Lakeside Drive, Park Royal, London NW10 7HQ
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F X
Form
40-F
Indicate
by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule
101(b)(1):
Indicate
by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule
101(b)(7):
10 May
2017
HMRC to issue preliminary notice of assessment
Diageo reported in its interim results for the six months to 31
December 2016 released on 26 January 2017 that Diageo had been
discussing its transfer pricing position and related issues with HM
Revenue & Customs, the U.K. tax authority, and that it had
entered into a process of collaborative working to seek clarity on
those issues. Those discussions are ongoing.
Further to this, Diageo has learned today that HM Revenue &
Customs intends to issue preliminary notices of assessment under
the new Diverted Profits Tax regime, which came into effect in
April 2015. Diageo understands that this will require Diageo
to pay additional tax and interest of approximately £107
million in aggregate for the financial years ended 30 June 2015 and
30 June 2016.
Diageo does not believe that it falls within the scope of the new
Diverted Profits Tax regime. Accordingly, Diageo will
challenge the assessments when they are received. In order to
do this, it will be necessary to pay the full amount assessed up
front and then continue to work to resolve this matter with
HMRC. The payment of this sum is not a reflection of Diageo's
view on the merits of the case and, based on its current
assessment, Diageo considers no provision is required in relation
to Diverted Profits Tax.
This issue does not change Diageo's expectation that the tax rate
before exceptional items for the year ending 30 June 2017 will be
approximately 21%.
This announcement contains inside information.
The person responsible for arranging the release of this
announcement on behalf of Diageo is John Nicholls, Deputy Company
Secretary.
ENDS
Enquiries:
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Media relations:
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Kirsty
King
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+44
(0)020 8978 6855
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Clemmie
Raynsford
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+44
(0)020 8978 1221
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+44
(0)020 8978 2749
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Investor relations:
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Sharon
Rolston
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+44
(0)20 8978 1219
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Andrew
Ryan
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+44
(0)20 8978 6504
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About Diageo
Diageo
is a global leader in beverage alcohol with an outstanding
collection of brands including Johnnie Walker, Crown Royal, JeB,
Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One
vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and
Guinness.
Diageo
is a global company, and our products are sold in more than 180
countries around the world. The company is listed on both the
London Stock Exchange (DGE) and the New York Stock Exchange (DEO).
For more information about Diageo, our people, our brands, and
performance, visit us at www.diageo.com.
Visit Diageo's global responsible drinking resource, www.DRINKiQ.com,
for information, initiatives, and ways to share best
practice.
Cautionary statement concerning forward-looking
statements
This
document contains 'forward-looking' statements. These statements
can be identified by the fact that they do not relate only to
historical or current facts. In particular, forward-looking
statements include all statements that express forecasts,
expectations, plans, outlook, objectives and projections with
respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the
impact of changes in interest or exchange rates, the availability
or cost of financing to Diageo, anticipated cost savings or
synergies, expected investments, the completion of Diageo's
strategic transactions and restructuring programmes, anticipated
tax rates, changes in the international tax environment, expected
cash payments, outcomes of litigation, anticipated deficit
reductions in relation to pension schemes and general economic
conditions. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements, including factors that are outside Diageo's
control.
These
factors include, but are not limited to:
●
economic, political, social or other developments in
countries and markets in which Diageo operates, which may
contribute to reduced demand for Diageo's products, reduced
consumer spending, negative impacts on Diageo's customer, supplier
and financial counterparties or the imposition of import,
investment or currency restrictions;
●
the results of the decision in the United Kingdom's
referendum on 23 June 2016 to leave the European Union and its
stated intention to exit the single market, which may lead to a
sustained period of economic and political uncertainty and
complexity until the detailed terms of the United Kingdom's exit
from the European Union and any successor trading arrangements with
other countries are finalised, which may negatively impact economic
conditions in Europe more generally and could have an adverse
impact on Diageo's business operations and financial
performance;
●
changes in consumer preferences and tastes, including
as a result of changes in demographic and social trends, public
health regulations and travel, vacation or leisure activity
patterns, or as a result of contamination, counterfeiting or other
circumstances which could harm the integrity or sales of Diageo's
brands;
●
any litigation or other similar proceedings (including
with tax, customs and other regulatory authorities), including that
directed at the drinks and spirits industry generally or at Diageo
in particular, or the impact of a product recall or product
liability claim on Diageo's profitability or
reputation;
●
the effects of climate change and related regulations
and other measures to address climate change, including any
resulting impact on the cost and supply of water;
●
changes in the cost of production, including as a
result of increases in the cost of commodities, labour and/or
energy or as a result of inflation;
●
legal and regulatory developments, including changes in
regulations regarding production, product liability, distribution,
importation, labelling, packaging, consumption, advertising and
data privacy; changes in tax law (including tax treaties), rates or
requirements (including with respect to the impact of excise tax
increases) or accounting standards; and changes in environmental
laws, health regulations and the laws governing labour and
pensions;
●
changes to the international tax environment such as the
OECD Base Erosion and Profit Shifting Initiative and EU anti-tax
abuse measures resulting in uncertainty around the application of
existing and new tax laws, leading to unexpected tax
exposures;
●
the consequences of any failure by Diageo to comply with
anti-corruption and other laws and regulations or any failure of
Diageo's related internal policies and procedures to comply with
applicable law;
●
ability to maintain Diageo's brand image and corporate
reputation or to adapt to a changing media environment, and
exposure to adverse publicity, whether or not justified, and any
resulting impacts on Diageo's reputation and the likelihood that
consumers choose products offered by Diageo's
competitors;
●
increased competitive product and pricing pressures, including as a
result of actions by increasingly consolidated competitors, that
could negatively impact Diageo's market share, distribution
network, costs or pricing;
●
the effects of Diageo's business strategies, including in relation
to expansion in emerging markets and growth of participation in
international premium spirits markets, the effects of business
combinations, partnerships, acquisitions or disposals, existing or
future, and the ability to realise expected synergies and/or costs
savings;
●
Diageo's ability to benefit from its strategy, including its
ability to expand into new markets, to complete and benefit from
existing or future business combinations or other transactions, to
implement cost saving and productivity initiatives or to forecast
inventory levels successfully;
●
contamination, counterfeiting or other events that could adversely
affect the perception of Diageo's brands;
●
increased costs or shortages of talent;
●
disruption to production facilities or business service centres or
information systems (including cyber-attack), existing or
future;
●
fluctuations in exchange rates and interest rates, which may impact
the value of transactions and assets denominated in other
currencies, increase the cost of financing or otherwise affect
Diageo's financial results;
●
movements in the value of the assets and liabilities related
to Diageo's pension funds;
●
renewal of supply, distribution, manufacturing or licence
agreements (or related rights) and licences on favourable terms or
at all when they expire; and
●
failure of Diageo to protect its intellectual property
rights.
All
oral and written forward-looking statements made on or after the
date of this document and attributable to Diageo are expressly
qualified in their entirety by the above factors and by the 'Risk
factors' section in our annual report for the financial year ended
30 June 2016. Any forward-looking statements made by or on behalf
of Diageo speak only as of the date they are made. Diageo does not
undertake to update forward-looking statements to reflect any
changes in Diageo's expectations with regard thereto or any changes
in events, conditions or circumstances on which any such statement
is based. The reader should, however, consult any additional
disclosures that Diageo may make in any documents which it
publishes and/or files with the US Securities and Exchange
Commission (SEC). All readers, wherever located, should take note
of these disclosures.
This
document includes names of Diageo's products, which constitute
trademarks or trade names which Diageo owns, or which others own
and license to Diageo for use. All rights reserved. © Diageo
plc 2017.
The
information in this document does not constitute an offer to sell
or an invitation to buy shares in Diageo plc or an invitation or
inducement to engage in any other investment
activities.
This
document may include information about Diageo's target debt rating.
A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time
by the assigning rating organisation. Each rating should be
evaluated independently of any other rating.
Past
performance cannot be relied upon as a guide to future
performance.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Diageo
plc
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(Registrant)
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Date: 10
May 2017
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By:
/s/John Nicholls
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Name:
John Nicholls
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Title:
Deputy Company Secretary
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