DIAGEO chief executive Paul Walsh is expected to be quizzed this week on growing speculation linking the spirits company with Heineken.
It is thought Walsh will reveal further evidence that the future of Guinness lies outside the UK and Ireland as it looks to protect itself from declining beer markets in the UK by increasing its range of "super-premium" products such as Dutch vodka
brand Ketel One.
Analysts say beer is moving rapidly down the path of consolidation and there are companies such as Heineken and SAB Miller that are the same size as Diageo. Last month Budweiser brewer Anheuser-Busch succumbed to a £28bn bid from rival InBev.
David Liston, senior beverage analyst at Barclays Wealth, said: "Diageo's end game is to form a total alcohol company with beer, wine and spirits. What they are doing is waiting for the beer companies to sort themselves out and then it is not beyond the bounds of reason for them to merge with a company such as Heineken. Consolidation in the beer industry has a long way to go yet."
Walsh is set to deliver Diageo's target of 9% operating profit growth in full-year results due on Thursday. Bernstein analyst Trevor Sterling predicts operating profits of £2.37bn compared with last year's £2.16bn in the year to June 30.
But he added: "The US is likely to see a continued modest decline in volume growth as the housing crises in Ireland, Spain and the UK, partially offset by robust pricing, result in organic top-line growth slowing."
Diageo hopes its geographical spread will protect it from any slowdown. As well as the growing African beer market, Diageo highlighted higher Scotch sales in Latin America and the Middle East, and new Asian markets such as Vietnam compensating slowing western European markets.
Asia Pacific remains the company's smallest region in sales terms, accounting for just £840m, but growth is strong. Analysts expect a positive update from China, where Johnnie Walker sales are growing.
Sam Hart, drinks analyst at Charles Stanley, said: "The company and most investors now acknowledge that the future of Guinness lies outside the UK and Ireland.
"Guinness has been generating very good growth in Nigeria and other African countries in recent years, and I expect this trend to continue in future years as disposable incomes continue to rise in that part of the world."
