Diageo

If the social acceptability of Diageo’s products declines, or if litigation is directed at the beverage alcohol industry,

Diageo’s sales volume could decrease and the business could be materially adversely affected In recent years, there ha

been increased social and political attention directed to the beverage alcohol industry. Diageo believes that this attention is the

result of public concern over problems related to alcohol abuse, including drink driving, underage drinking and health

consequences from the misuse of alcohol. If the social acceptability of beverage alcohol were to decline significantly, sales of

Diageo’s products could materially decrease. Similarly, recent litigation against the tobacco industry has directed increased

attention to other industries, including the beverage alcohol industry. If the drinks industry were to become involved in litigation o

the type brought against other industries, such as tobacco, Diageo’s business could be materially adversely affected.

Diageo learned on 20 November 2003 that a purported class action lawsuit, Hakki v. Adolph Coors Company et al., was

commenced against a number of alcohol beverage companies on 14 November 2003, including Diageo, in the Superior Court o

Washington, D.C. Diageo has not been served with a lawsuit. The complaint asserts claims under the District of Columbia

Consumer Protection Procedures Act (DCCPPA) and the common law of the District of Columbia that the defendants specificall

targeted