Trading Statement

Diageo PLC
30 October 2001

DIAGEO AGM 2001 TRADING UPDATE

Diageo's Group Chief Executive, Paul Walsh, will make the following comments
on current trading at Diageo's AGM which will be held this afternoon:

'Diageo has begun the current financial year with real momentum behind its
premium drinks business. The global priority brands remain the key drivers of
performance and in the first three months have shown continued strong growth
in net sales. The success of our ready to drink portfolio is playing an even
bigger part this year as we roll out both existing and new products in new
markets and to meet new consumer occasions. Where we have experienced some
slowdown it has been in the level of volume growth outside the global priority
brands. However overall net sales growth remains at similar levels to that
achieved last year.

'At this time it is too early to tell what may be the long-term effect of the
events of 11 September either on consumer behaviour or on the world economy.
We have, however, already taken action to mitigate potential negative effects
on our business, mainly through a review of our cost base. We will also ensure
that we are building upon the improvements we have already made in marketing
effectiveness. Our objective is to continue to invest to build our brands
while capturing efficiencies arising out of the current media deflationary
environment.

'To date the post 11 September effect seems to have been limited to particular
areas of our North American business. These are primarily on trade business
accounts, military bases and travel related accounts such as airports, hotels,
convention centres and holiday resorts. We have not yet seen any significant
change in the performance of our brands in the off trade which accounts for
most of our premium drinks business in North America.

'Outside North America the direct effect has been muted. Great Britain
continues to perform strongly benefiting from continued growth of Smirnoff Ice
and the launch of Archers Aqua. In the other major markets of Spain and
Ireland and in the Key and Venture markets, there has been no significant
change in the overall trading performance since 11 September. We do, however,
expect that our duty free business will be negatively affected by the
reduction in travel, which has occurred around the world.

'Burger King's performance has improved in the first three months of the year.
Worldwide comparable restaurant sales were flat in the period and in September
they were up 3%. Pillsbury experienced some softness in sales volumes at the
beginning of the year in its Pillsbury North America business. Consumer
takeaway was however up 3% in the same period and recently therefore volume
performance has strengthened. International volume is up slightly and the
performance of the foodservice business is improving with volumes now in line
with the comparable period last year.

'In connection with the proposed combination of The Pillsbury Company with
General Mills, we have been discussing possible adjustments to the financial
terms of the transaction. We do not expect the changes to be material overall
and anticipate resolving any open issues in time to complete the combination
by the end of the week. We are discussing with the regulatory authorities
possible ways to resolve the issues they have identified in relation to our
proposed purchase, together with Pernod Ricard, of the Seagram spirits and
wine business.'



Statement ends

For further information

Media enquiries to      Kathryn Partridge     + 00 44 (0) 20 7927 5225/5967

[e-mail]

Investor enquiries to Catherine James     + 00 44 (0) 20 7927 5272

                              [e-mail]

Diageo's AGM will be held at 2.30pm this afternoon at The Queen Elizabeth II
Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE.

A video interview with Paul Walsh is available on www.diageo.com and
www.cantos.com from 07.00 today.