Not only has sales growth slowed but price rises have been harder, indeed impossible, to achieve. The cost-cutting programme is under way, but did not start soon enough, and is clearly failing to keep up with the speed of disinflation at the sales end of the business.
The shares fell 18p to 484p. Guinness fulfilled a promise of pre- exceptional profits of at least pounds 875m, but only just - with a pounds 22m disposal windfall offsetting a pounds 20m European reorganisation provision.
It will be some time before Guinness enjoys double-digit profit growth, because of continuing recession in some of its main markets, low inflation and a lame Spanish nag called Cruzcampo.
If it had known what it knows now, it is unlikely that Guinness would have bought the Cruzcampo brewing company. At the time Spain was bathing in sunny economic weather, just before hosting the Olympics and Expo '92.
Guinness has no intention of selling Cruzcampo. Fine. But who would buy it now, anyway? Unemployment in Spain is a conservative 23 per cent, and in Cruzcampo's backyard in Andalucia nearly one in three are out of work.
In the mainstay spirits business, Johnnie Walker Red Label reinforced its position as the world's best-selling Scotch. Total spirits sales, however, grew by a pedestrian 1 per cent to 52 million cases; and intense competition pegged the average price rise to 1 per cent - in other words, real prices fell.
Guinness used to perform miracles by aggressively raising prices of premium brands. Those days have gone, because consumer resistance has led to trading down to cheaper products instead. A dose of selective inflation in premium drink prices is what Guinness now needs to pay for its heavy investment programme. Unless that happens, there is no strong reason to buy the shares.Reuse content