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Diageo records rising worldwide sales - but European sales slide

The world’s biggest producer of alcoholic drinks says sales in some emerging markets didn’t rise as much as expected.

Image: Photocall Ireland

THE OWNER of Guinness and the world’s biggest producer of alcoholic drinks, Diageo, has recorded rising third-quarter sales, aided by a strong performance in the United States – but also revealed a sharp slowdown in key emerging markets.

Group sales, excluding acquisitions, disposals and currency effects, grew 4.0 per cent in its third quarter, or the three months to the end of March, Diageo said in a trading update.

That compared with a 6.0 per cent increase in the same part of its previous financial year. Volumes meanwhile slid 1.0 per cent.

Market expectations had been for sales growth of 5.0 per cent, according to Dow Jones Newswires.

Diageo added that sales meanwhile increased by 5.0 per cent in the nine months to the end of March.

Over the same period, North America sales rose 6.0 per cent, up from 5.0 percent a year earlier.

Asia Pacific sales meanwhile gained just 4.0 percent over the nine months. That contrasted with 10-percent growth in the previous fiscal year.

On a nine-month basis, Diageo also posted a combined 9.0 per cent increase for Africa, Eastern Europe and Turkey. Latin America and Caribbean sales soared 14 per cent, despite weakness in Brazil, while Western Europe sales dropped 4.0 per cent.

Diageo added that its Asia Pacific performance was hit by the timing of price increases and the decline of the Scotch whisky market in South Korea.

“Our performance in the quarter was robust and again demonstrates Diageo’s strengths, global reach and category breadth and depth,” added chief executive Paul S Walsh in the statement.

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“Therefore despite consumer weakness in three markets, Korea, Nigeria and Brazil, Diageo’s performance for the nine months is in line with the first half and our expectations.

“Strong performance from our biggest business, US spirits; the continued growth of spirits in Africa; share gains across our markets in Asia Pacific and double digit growth of Johnnie Walker, Crown Royal, Buchanan’s, and Tanqueray are the highlights of the quarter.

“Given our market positions and geographic diversity we remain confident that Diageo’s performance continues to be in line with our medium term guidance.”

The British brewing giant’s key products include Baileys liqueur, Captain Morgan rum, Johnnie Walker whisky, Smirnoff vodka and Tanqueray gin. Almost 40 per cent of Diageo’s business is in emerging markets.

- © AFP, 2013

About the author:

Gavan Reilly

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