Paul Walsh, the Diageo chief executive, is a disciple of “premiumisation”. In the eight years since he took the helm of the world's biggest drinks company, he has focused increasingly on premium brands that command premium prices.

In doing so, Mr Walsh has tapped into a burgeoning demand by wealthy consumers for ever more exclusive brands - not only in the developed markets of the West but also in the fast-growing economies of China, India and the Middle East.

Yet as more drinks companies have targeted the premium sector, so the likes of Diageo have gone further upmarket.

After yesterday's deal, Mr Walsh's drinks cabinet now contains a premium vodka (Smirnoff) a super-premium vodka (Ketel One) and even an ultra-premium vodka (Cîroc). An American shopper would pay about $13 (£6.60) for a bottle for Smirnoff, $27 for Ketel One and about $33 for Cîroc.

In moving further upmarket, the Diageo marketeers have devised a new take on “premiumisation”. According to Mr Walsh, the Ketel One deal takes the company into “discernment territory”.

“People don't want to drink more, they want to drink better,” he says. “They're looking for something stylish, with a strong brand, provenance and quality. Super-premium brands are also what we call ‘sticky' - consumers are fiercely loyal to the brand.”

The company's targeting of “affluent, brand-conscious consumers” has gone hand in hand with a revival of trendy cocktail bars and it is no coincidence that some of Diageo's marketing millions have been spent sponsoring television shows such as Sex and the City.

Ketel One, along with vodka rivals such as Grey Goose and Belvedere, is a firm favourite with bartenders. “You go to any high-end bar and you'll see Ketel One on the back bar,” says Mr Walsh, whose favoured tipple is “a martini with Ketel One”.

The Diageo boss reckons that such brands are far more likely to ride out a consumer spending downturn than low-quality, own-label products. “Whatever you think about it, there are plenty of consumers that have a lot of disposable income who are largely unaffected by what's happening.”

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