Diageo faces probe from US regulator over excess stock

Diageo makes Smirnoff vodka and Johnnie Walker whiskey

Click to follow
The Independent Online

One of the world's biggest drinks companies is facing a probe by the US Securities and Exchange Commission over the shipping of excess stock.

The drinks company could have been reporting higher sales than were placed by sending customers more cases than they order.

Diageo, which makes Smirnoff vodka and Johnnie Walker whiskey as well as Guinness, said it was "working to respond fully to the SEC's requests for information in this matter".

Diageo, which makes Smirnoff vodka and Johnnie Walker whiskey as well as Guinness, relies on the US for 40 per cent of its annual sales.

A sales slide in the first half of the year had prompted Diageo to encourage its trade partners to destock, so that it could adapt better to consumer trends.

Figures this year have looked especially bad next to last year, when the drinks trade was stocking up on spirits over fears of a hike in duty.

Shares in Diageo were down 1.9 per cent at lunchtime on Friday.

Additional reporting by Reuters