Operating costs (Tables)

12 Months Ended

Jun. 30, 2019

Analysis of income and expense [abstract]

Schedule of operating costs by nature

	2019 £ million		2018 £ million		2017 £ million
Excise duties	6,427		6,269		6,064
Cost of sales	4,866		4,634		4,680
Marketing	2,042		1,882		1,798
Other operating expenses	1,917		1,956		2,013
	15,252		14,741		14,555
Comprising:
Excise duties – Great Britain	898		853		774
– United States	587		548		558
– India	2,202		2,094		2,073
– Other	2,740		2,774		2,659
Increase in inventories	(446	)	(296	)	(146	)
Raw materials and consumables	3,007		3,052		2,813
Marketing	2,042		1,882		1,798
Other external charges	2,285		1,849		2,124
Staff costs	1,580		1,509		1,583
Depreciation, amortisation and impairment	374		493		361
Gains on disposal of properties	(5	)	(9	)	(7	)
Net foreign exchange (gains)/losses	(7	)	6		(16	)
Other operating income	(5	)	(14	)	(19	)
	15,252		14,741		14,555

Schedule of auditor fees

Other external charges include the fees of the principal auditor of the group, PricewaterhouseCoopers LLP and its affiliates (PwC) are analysed below.

	2019 £ million	2018 £ million	2017 £ million
Audit of these financial statements	3.8	3.3	3.1
Audit of financial statements of subsidiaries	3.4	3.3	3.4
Audit related assurance services(i)	1.6	1.6	1.6
Total audit fees (Audit fees)	8.8	8.2	8.1
Other services relevant to taxation (Tax fees)	—	0.1	0.3
Other assurance services (Audit related fees)(ii)	0.7	0.6	0.5
All other non-audit fees (All other fees)	0.2	1.0	0.9
	9.7	9.9	9.8

(i) Audit related assurance services are principally in respect of reporting under section 404 of the US Sarbanes-Oxley Act and the review of the interim financial information.

(ii) Other assurance services comprise the aggregate fees for assurance and related services that are in respect of the performance of the audit or review of the financial statements and are not reported under ‘total audit fees’.

(1) Disclosure requirements for auditor fees in the United States are different from those required in the United Kingdom. The terminology by category required in the United States is disclosed in brackets in the above table. All figures are the same for the disclosures in the United Kingdom and the United States apart from £0.4 million (2018 – £0.4 million; 2017 – £0.3 million) of the cost in respect of the review of the interim financial information which would be included in audit related fees in the United States rather than audit fees.

Schedule of additional information

(c) Staff costs and average number of employees

	2019 £ million	2018 £ million	2017 £ million
Aggregate remuneration
Wages and salaries	1,344	1,272	1,330
Share-based incentive plans	50	40	34
Employer’s social security	96	95	93
Employer’s pension
– defined benefit plans	61	73	95
– defined contribution plans	19	18	17
Other post employment plans	10	11	14
	1,580	1,509	1,583

The average number of employees on a full time equivalent basis (excluding employees of associates and joint ventures) was as follows:

	2019	2018	2017
North America	2,410	2,406	2,251
Europe and Turkey	3,609	3,747	4,074
Africa	4,338	4,625	4,898
Latin America and Caribbean(i)	1,610	2,536	2,573
Asia Pacific	7,038	8,008	8,690
ISC(i)	4,919	4,227	4,244
Corporate and other	4,496	4,368	3,703
	28,420	29,917	30,433

(i) The increase in the ISC in the year ended 30 June 2019 is primarily due to the transfer of supply employees in Mexico to ISC. Comparative figures have not been restated.

Schedule of exceptional operating items

Included in other operating costs are the following exceptional charges:

	2019 £ million	2018 £ million	2017 £ million
Staff costs
– Guaranteed minimum pension equalisation charge	21	—	—
Other external charges	53	—	42
Decrease in inventories	—	3	—
Depreciation, amortisation and impairment
– Brand, goodwill and tangible asset impairment	—	125	—
Total exceptional operating costs (note 4)	74	128	42