Distribution rights

Diageo PLC
5 February 2002

5 February 2002


          Diageo announces that it has agreed new arrangements for the
                    distribution rights of the Cuervo brand

Diageo plc has today announced that it has formalised new arrangements in
respect of its distribution rights for the Cuervo brand in the United States
which now extends to 2013. Diageo will return the 45% equity stake it holds in
Jose Cuervo SA and Jose Cuervo will transfer back to Diageo its ownership
interest in certain Diageo brands in Mexico.

Diageo and Jose Cuervo have agreed to terminate their litigation in respect of
the Cuervo brand. The net effect of these new arrangements will involve an
outflow of cash for Diageo of $145 million. The change in these arrangements is
not expected to have a material effect on the profits of Diageo.

Paul Walsh, Diageo's chief executive, said:

'I am delighted that we have reached agreement on the future of the Cuervo brand
with Jose Cuervo. Jose Cuervo is a company of strong traditions with whom we
have had a long and successful relationship. This agreement means that we will
continue to work together to maintain the success of the Cuervo brand as part of
Diageo's premium drinks portfolio.

'This new longer term agreement marks another step in our journey to build
Diageo's position as the world's leading premium drinks company in a way which
creates value for our shareholders.'

                                   -- ends --

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