Diageo drink sales decline in UK
Thursday 09 February 2012
Drinks giant Diageo today said sales in the UK were falling behind its continental neighbours - although Britons are still lapping up vodka and Baileys.
Smirnoff and whiskey and cream-based liqueur Baileys remained popular in the six months to December 31, but overall sales still declined in the UK and were flat in Europe, which was supported by double-digit growth in France and Germany.
Diageo, which saw a 12% rise in pre-tax profits to £1.8 billion in the period, said UK sales were hit by a decision to hold firm on prices and cut the number of promotions.
Elsewhere, Latin America remained the company's strongest market with 23% sales growth, compared with 12% growth in Africa, 10% in Asia and 5% in North America.
Diageo is exposed to several struggling eurozone economies, such as Spain, Greece and Ireland, which have all posted declining sales as the wider problems flowing from the sovereign debt crisis lead to a squeeze in consumer spending.
Andrew Morgan, Diageo Europe president, said: "The economic environment, particularly in southern Europe, has impacted our performance in Western Europe, while in the emerging markets of Europe we have delivered strong growth."
Smirnoff vodka was up 8% in the period, driven by sales in the UK and Germany, while Captain Morgan grew by 25% in the region, although it has a relatively small hold in Europe compared with regions like the US.
The company, which employs 20,000 staff worldwide, has fully integrated its recently bought Mey Icki raki brand in Turkey as it looks to increase its exposure overseas.
Diageo, which sells its drinks in 180 countries across the globe, also has high exposure to emerging markets which have supported the half-year performance.
In Africa, Guinness sales were 10% ahead, while scotch label Johnnie Walker was up 32% and in Latin America the performance was driven by a 32% rise in Smirnoff sales.
Shares in Diageo fell more than 1% after the trading update was published.
- 1 Labour rallies behind Flint as deputy leader to offset a Corbyn win
- 2 The difference between a psychopath and a sociopath
- 3 Dutch King Willem-Alexander declares the end of the welfare state
- 4 'Cool kids' can go on to become losers in later life, study finds
- 5 Bulletproof armadillo puts Texas man in hospital after shot bounces off hard shell
Labour rallies behind Flint as deputy leader to offset a Corbyn win
Kim Jong-un is awarded global statesmanship prize by Indonesia
Dutch King Willem-Alexander declares the end of the welfare state
RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
Calais crisis: Migrants that have made it to the UK reveal how Britain has matched their expectations
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...
£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...
£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...
£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...