"There will need to be a review, sooner rather than later," said George Bull, chairman of Diageo, formed last week by the merger of British food and drink giants Guinness and Grand Metropolitan.
The company gets its new name from the Latin word for "day" and the Greek word for "world."
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In June, Y&R was tapped to handle print buying for GrandMet units International Distillers & Vintners and Pillsbury Co. Billings for 1996 were estimated at $54.5 million, according to Competitive Media Reporting.
Burnett handles print buying for United Distillers, the spirits unit of the former Guinness. The division spent $30.8 million on print advertising last year, according to CMR.
Guinness Import Co. spent an additional $1.8 million on print ads. Vernon, Sassos & McGill, New York, handles buying.
VARIETY OF AGENCIES
While consolidation appears likely on the media front, a diversity of agencies will handle creative, said Mr. Bull, formerly chairman of GrandMet.
"We tend to leave those decisions to individual divisions," he said. "We will probably continue to have a wide variety of agencies servicing the brands."
Diageo will have four divisions: Burger King Corp., Guinness, Pillsbury Co. and United Distillers & Vintners. BK does little print advertising, so is unlikely to be much affected by a print consolidation.
International Distillers & Vintners and United Distillers are now combined into United Distillers & Vintners.
The two companies were strongest in magazines -- GrandMet spent $49.8 million and Guinness, counting its beer brands, spent $31.2 million. The companies' combined strength would have made them the 13th-largest magazine advertiser last year, according to CMR.
Other media agencies handling Diageo brands in the U.S. include Tom Roberts & Associates, which handles outdoor for United Distillers, and Asch Outdoor, which handles International Distillers & Vintners.
Guinness and GrandMet are expected to be fully integrated by next summer, and no timetable has been set for agency decisions.
Consolidating media "is what you would expect," said Tom Pirko, president of consultancy BevMark. "That's the reason for doing a merger; to get bigger and have more clout and control."
Separately, the two companies -- which also market such brands as Tanqueray London gin and Stolichnaya vodka -- already were big marketers. Based on 1996 figures from Impact, Diageo will control 18 of the world's top 100 spirits brands. It moved 63.6 million cases of liquor in 1996, well ahead of No. 2 player Allied Domecq, which sold 28 million cases.
International Distillers & Vintners, the spirits unit of the former GrandMet, spent $39.1 million on its brands last year, making it the No. 2 spirits advertiser, according to CMR.
United Distillers, the Guinness spirits unit, spent a total of $33.8 million last year in 1996, making it the No. 3 category advertiser, according to CMR.
"We expect to maintain or increase our marketing budgets," Mr. Bull said.
As a condition of the merger, Diageo is required to spin off its Dewar's scotch and Bombay gin brands, which means that Burnett and Margeotes/Fertitta & Partners, New York, likely will lose those creative assignments.
Burnett handles Dewar's as well as the Johnnie Walker labels, and Margeotes handles Bombay in addition to Stoli.
Observers expect virtually all the major spirits marketers will consider acquiring those two brands, but Seagram Co. is considered the most likely purchaser.
If Seagram picks up Bombay, observers expect TBWA/Chiat Day to handle the business. The shop already works on Seagram's Absolut brand and it previously handled Bombay.