Diageo ‘committed to Irish market’

Global drinks giant Diageo is committed to its Irish operations, despite seeing continued “tough market conditions” here, as Guinness maintains its 32% market share.

The London-headquartered group — which owns iconic Irish brands such as Guinness, Baileys and Bushmills — yesterday reported first half net sales of £6.04 billion (€7.05bn); 5% up on a year-on-year basis, but marginally below analyst estimates.

Group operating profit, for the six months to the end of December, amounted to £2.04bn, up 11% on the corresponding period in the previous year.

The growth — which also saw sales volumes increase by 6% and basic earnings per share rise by 61% to 61.5p — was driven from outside of Diageo’s European business, Europe being the only region to show an annualised drop (2%) in net sales. There were single digit percentage sales increases in North America and Asia-Pacific and double digit percentage growth in Latin America and Africa.

Group chief executive Paul Walsh said: “These results reflect the global strength of our strategic brands, our leadership in the US spirits market and our increasing presence in the fastest growing markets of the world. Our expanding reach to emerging middle class consumers in faster growing markets was the key driver of our volume growth, while net sales growth was driven by our pricing strategy and premiumisation, especially in the US.”

Smirnoff, Captain Morgan and Johnnie Walker all saw single digit percentage sales growth. Global sales of Guinness grew by 7%, year-on-year, with Bushmills seeing double digit percentage growth in its overall sales.

Diageo said Europe, Britain and Ireland continued to be challenging, with “continued tough trading conditions” evident.

In Ireland, Guinness maintained its 32% market share, with the spirits division holding onto its 36% share. Bushmills performed strongly with net sales up 28% — year-on-year.

“Despite tough market conditions we remain committed to the Irish market and we are investing in supporting pubs and building our brands, including the sponsorship of over 40 Irish sports, music and cultural events,” noted David Smith, Diageo’s country director for Ireland.

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