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Post employment benefits (Tables)
 12 Months Ended
Jun. 30, 2020
Disclosure of defined benefit plans [abstract]  
Schedule of funding valuations of the significant defined benefit plans
The most recent funding valuations of the significant defined benefit plans were carried out as follows:
Principal plans
  
Date of valuation
United Kingdom(i)
  
1 April 2018
Ireland(ii)
  
31 December 2018
United States
  
1 January 2020
(i)
The Diageo Pension Scheme (DPS) closed to new members in November 2005. Employees who have joined Diageo in the United Kingdom since the defined benefit scheme closed had been eligible to become members of the Diageo Lifestyle Plan (a cash balance defined benefit pension plan) until 1 January 2018. Since then new employees have been eligible to become members of a Diageo administered defined contribution plan.
(ii)
The Irish scheme closed to new members in May 2013. Employees who have joined Diageo in Ireland since the defined benefit scheme closed have been eligible to become members of Diageo administered defined contribution plans.
Schedule of amounts charged to consolidated income statement for group's defined benefit post employment plans and consolidated statement of comprehensive income
The amounts charged to the consolidated income statement for the group’s defined benefit post employment plans and the consolidated statement of comprehensive income for the three years ended 30 June 2020 are as follows:
 
 
2020
£ million

 
2019
£ million

 
2018
£ million

Current service cost and administrative expenses
 
(109
)
 
(110
)
 
(123
)
Past service gains - ordinary activities
 
50

 
56

 
33

Past service losses - exceptional
 
—

 
(21
)
 
—

Gains on curtailments and settlements
 
12

 
4

 
6

Charge to operating profit
 
(47
)
 
(71
)
 
(84
)
Net finance gain/(charge) in respect of post employment plans
 
9

 
7

 
(11
)
Charge before taxation(i)
 
(38
)
 
(64
)
 
(95
)
Actual returns less amounts included in finance income
 
774

 
438

 
312

Experience gains/(losses)
 
34

 
113

 
(30
)
Changes in financial assumptions
 
(754
)
 
(514
)
 
108

Changes in demographic assumptions
 
(14
)
 
(6
)
 
69

Other comprehensive income
 
40

 
31

 
459

Changes in the surplus restriction
 
(2
)
 
2

 
(2
)
Total other comprehensive income
 
38

 
33

 
457

(1) The year ended 30 June 2020 includes past service gains of £47 million in respect of the Irish Scheme following separate communications to the deferred members in respect of changing their expectations of a full pension prior to reaching the age of 65 and to pensioners in respect of future pension increases. (2019 - £54 million in respect of changes made to future pension increases for members of the UK Scheme and changes to the principal Irish Scheme.) The exceptional past service loss, in the year ended 30 June 2019, of £21 million is in respect of the equalisation of Guaranteed Minimum Pension (GMP) benefits for men and women.
Schedule of charge before taxation
(i) The charge/income before taxation in respect of the following countries is:
 
 
2020
£ million

 
2019
£ million

 
2018
£ million

United Kingdom
 
(23
)
 
(3
)
 
(49
)
Ireland
 
34

 
(13
)
 
1

United States
 
(30
)
 
(30
)
 
(29
)
Other
 
(19
)
 
(18
)
 
(18
)
 
 
(38
)
 
(64
)
 
(95
)
Schedule of movement in net deficit
The movement in the net (deficit)/surplus for the two years ended 30 June 2020 is set out below:
 
 
Plan
assets
£ million

 
Plan
liabilities
£ million

 
Net
(deficit)/surplus
£ million

At 30 June 2018
 
9,310

 
(9,244
)
 
66

Exchange differences
 
45

 
(55
)
 
(10
)
Charge before taxation
 
234

 
(298
)
 
(64
)
Other comprehensive income/(loss)(i)
 
438

 
(407
)
 
31

Contributions by the group
 
192

 
—

 
192

Employee contributions
 
5

 
(5
)
 
—

Benefits paid
 
(511
)
 
511

 
—

At 30 June 2019
 
9,713

 
(9,498
)
 
215

Exchange differences
 
65

 
(73
)
 
(8
)
Charge before taxation
 
198

 
(236
)
 
(38
)
Other comprehensive income/(loss)(i)
 
774

 
(734
)
 
40

Contributions by the group
 
156

 
—

 
156

Employee contributions
 
5

 
(5
)
 
—

Benefits paid
 
(489
)
 
489

 
—

At 30 June 2020
 
10,422

 
(10,057
)
 
365

(i)    Excludes surplus restriction.
Schedule of plan assets and liabilities by type of post employment benefit and country
The plan assets and liabilities by type of post employment benefit and country is as follows:
 
 
2020
 
 
2019
 
 
 
Plan
assets
£ million

 
Plan
liabilities
£ million

 
Plan
assets
£ million

 
Plan
liabilities
£ million

Pensions
 
 
 
 
 
 
 
 
United Kingdom
 
7,696

 
(6,831
)
 
7,115

 
(6,257
)
Ireland
 
1,810

 
(2,031
)
 
1,747

 
(2,098
)
United States
 
660

 
(578
)
 
593

 
(545
)
Other
 
183

 
(240
)
 
186

 
(234
)
Post employment medical
 
2

 
(288
)
 
1

 
(275
)
Other post employment
 
71

 
(89
)
 
71

 
(89
)
 
 
10,422

 
(10,057
)
 
9,713

 
(9,498
)
Schedule of balance sheet analysis of post employment plans
The balance sheet analysis of the post employment plans is as follows:
 
 
2020
 
 
2019
 
 
 
Non-
current
assets(i) 
£ million

 
Non-
current
liabilities
£ million

 
Non-
current
assets(i)
£ million

 
Non-
current
liabilities
£ million

Funded plans
 
1,111

 
(434
)
 
1,060

 
(547
)
Unfunded plans
 
—

 
(315
)
 
—

 
(299
)
 
 
1,111

 
(749
)
 
1,060

 
(846
)
(i)    Includes surplus restriction of £3 million (2019 – £1 million).
Schedule of weighted average assumptions used to determine group's deficit/surplus in main post employment plans
The following weighted average assumptions were used to determine the group’s deficit/surplus in the main post employment plans at 30 June in the relevant year. The assumptions used to calculate the charge/credit in the consolidated income statement for the year ending 30 June are based on the assumptions disclosed as at the previous 30 June.
 
 
United Kingdom
 
Ireland
 
United States(i)
 
 
2020
%
 
2019
%
 
2018
%
 
2020
%
 
2019
%
 
2018
%
 
2020
%
 
2019
%
 
2018
%
Rate of general increase in salaries(ii)
 
3.2
 
3.6
 
4.3
 
2.6
 
2.3
 
3.2
 
—
 
—
 
—
Rate of increase to pensions in payment
 
3.0
 
3.2
 
3.3
 
1.4
 
1.5
 
2.0
 
—
 
—
 
—
Rate of increase to deferred pensions
 
2.1
 
2.2
 
2.1
 
1.2
 
1.3
 
1.8
 
—
 
—
 
—
Discount rate for plan liabilities
 
1.5
 
2.3
 
2.8
 
1.2
 
1.2
 
1.7
 
2.6
 
3.4
 
4.1
Inflation - CPI
 
2.1
 
2.2
 
2.1
 
1.2
 
1.3
 
1.8
 
1.4
 
1.7
 
2.1
Inflation - RPI
 
2.8
 
3.2
 
3.1
 
—
 
—
 
—
 
—
 
—
 
—
(i)
The salary increase assumption in the United States is not a significant assumption as only a minimal amount of members’ pension entitlement is dependent on a member’s projected final salary.
(ii)    The salary increase assumptions include an allowance for age related promotional salary increases.
Schedule of expected age at death of an average worker who retires currently at age of 65, and one who is currently aged 45 and subsequently retires at the age of 65
For the principal UK and Irish pension funds, the table below illustrates the expected age at death of an average worker who retires currently at the age of 65, and one who is currently aged 45 and subsequently retires at the age of 65:
 
 
United Kingdom(i)
 
Ireland(ii)
 
United States
 
 
2020
Age
 
2019
Age
 
2018
Age
 
2020
Age
 
2019
Age
 
2018
Age
 
2020
Age
 
2019
Age
 
2018
Age
Retiring currently at age 65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Male
 
86.4
 
86.2
 
86.1
 
86.6
 
86.5
 
86.4
 
85.6
 
85.7
 
86.0
Female
 
88.7
 
88.5
 
88.4
 
89.3
 
89.2
 
89.2
 
87.3
 
87.7
 
88.0
Currently aged 45, retiring at age 65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Male
 
88.5
 
88.3
 
88.2
 
89.6
 
89.5
 
89.4
 
87.2
 
87.3
 
87.6
Female
 
90.8
 
90.6
 
90.5
 
92.3
 
92.2
 
92.1
 
88.9
 
89.3
 
89.6
(i)
Based on the CMI’s S2 mortality tables with scaling factors based on the experience of the plan and where people live, with suitable future improvements.
(ii)
Based on the ‘00’ series of mortality tables with scaling factors based on the experience of the plan and with suitable future improvements.
Schedule of sensitivity analyses of potential impacts on consolidated income statement and on plan liabilities
For the significant assumptions, the following sensitivity analyses estimate the potential impacts on the consolidated income statement for the year ended 30 June 2021 and on the plan liabilities at 30 June 2020:
 
 
United Kingdom
 
 
Ireland
 
 
United States and other
 
Benefit/(cost)
 
Operating
profit
£ million

 
Profit
after
taxation
£ million

 
Plan
liabilities(i)
£ million

 
Operating
profit
£ million

 
Profit
after
taxation
£ million

 
Plan
liabilities(i)
£ million

 
Operating
profit
£ million

 
Profit
after
taxation
£ million

 
Plan
liabilities(i)
£ million

Effect of 0.5% increase in discount rate
 
5

 
17

 
568

 
2

 
3

 
174

 
1

 
2

 
38

Effect of 0.5% decrease in discount rate
 
(6
)
 
(14
)
 
(644
)
 
(2
)
 
(2
)
 
(202
)
 
(2
)
 
(2
)
 
(42
)
Effect of 0.5% increase in inflation
 
(5
)
 
(9
)
 
(405
)
 
(1
)
 
(3
)
 
(152
)
 
(1
)
 
(1
)
 
(14
)
Effect of 0.5% decrease in inflation
 
5

 
10

 
448

 
1

 
3

 
126

 
1

 
1

 
13

Effect of one year increase in life expectancy
 
(1
)
 
(4
)
 
(304
)
 
—

 
(1
)
 
(86
)
 
—

 
(1
)
 
(34
)
 
(i)
The estimated effect on the liabilities excludes the impact of any interest rate and inflation swaps held by the pension plans.

(1)
The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions and may not be representative of the actual change. Each sensitivity is calculated on a change in the key assumption while holding all other assumptions constant. The sensitivity to inflation includes the impact on all inflation linked assumptions (e.g. pension increases and salary increases where appropriate).
Schedule of analysis of fair value of plan assets
An analysis of the fair value of the plan assets is as follows:
 
 
2020
 
 
2019
 
 
 
United Kingdom
£ million

 
Ireland
£ million

 
United
States and
other
£ million

 
Total
£ million

 
United
Kingdom
£ million

 
Ireland
£ million

 
United
States and
other
£ million

 
Total
£ million

Equities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quoted
 
1

 
315

 
255

 
571

 
19

 
294

 
248

 
561

Unquoted and private equity
 
501

 
1

 
21

 
523

 
504

 
—

 
21

 
525

Bonds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-interest government
 
114

 
124

 
50

 
288

 
123

 
129

 
46

 
298

Inflation-linked government
 
—

 
247

 
—

 
247

 
—

 
262

 
—

 
262

Investment grade corporate
 
507

 
306

 
467

 
1,280

 
404

 
337

 
421

 
1,162

Non-investment grade
 
137

 
77

 
17

 
231

 
163

 
74

 
15

 
252

Loan securities
 
1,697

 
328

 
—

 
2,025

 
1,362

 
331

 
—

 
1,693

Repurchase agreements
 
4,809

 
—

 
—

 
4,809

 
4,629

 
—

 
—

 
4,629

Liability driven investment (LDI)
 
222

 
64

 
—

 
286

 
185

 
40

 
—

 
225

Property - unquoted(i)
 
620

 
85

 
1

 
706

 
744

 
84

 
1

 
829

Hedge funds
 
92

 
134

 
4

 
230

 
75

 
135

 
—

 
210

Interest rate and inflation swaps
 
(1,048
)
 
66

 
—

 
(982
)
 
(1,048
)
 
30

 
—

 
(1,018
)
Cash and other
 
44

 
63

 
101

 
208

 
(45
)
 
31

 
99

 
85

Total bid value of assets
 
7,696

 
1,810

 
916

 
10,422

 
7,115

 
1,747

 
851

 
9,713

(1)
The asset classes include some cash holdings that are temporary. This cash is likely to be invested imminently and so has been included in the asset class where it is anticipated to be invested in the long-term.
(i) At 30 June 2020, the fair value of property assets of £331 million were subject to “material valuation uncertainty”. The external valuers have confirmed, the inclusion of the “material valuation uncertainty” declaration does not mean that valuations cannot be relied upon but instead in the current extraordinary circumstances less certainty can be attached to valuations than would otherwise be the case. The group considers the value to be materially accurate on the basis that any short term impact of Covid-19 would not be reflective of the value of these long-term investments.

Schedule of timing of benefit payments
The following table provides information on the timing of the benefit payments and the average duration of the defined benefit obligations and the distribution of the timing of benefit payments:
 
 
United Kingdom
 
 
Ireland
 
 
United States
 
 
 
2020
£ million

 
2019
£ million

 
2020
£ million

 
2019
£ million

 
2020
£ million

 
2019
£ million

Maturity analysis of benefits expected to be paid
 
 
 
 
 
 
 
 
 
 
 
 
Within one year
 
346

 
395

 
76

 
75

 
56

 
63

Between 1 to 5 years
 
1,202

 
1,197

 
364

 
367

 
202

 
202

Between 6 to 15 years
 
2,556

 
2,663

 
691

 
723

 
357

 
359

Between 16 to 25 years
 
2,083

 
2,078

 
627

 
657

 
196

 
207

Beyond 25 years
 
2,648

 
2,909

 
918

 
1,008

 
173

 
185

Total
 
8,835

 
9,242

 
2,676

 
2,830

 
984

 
1,016

 
 
years

 
years

 
years

 
years

 
years

 
years

Average duration of the defined benefit obligation
 
18

 
17

 
18

 
18

 
11

 
10