First Guinness sales rise in six years

Net sales of Guinness in Ireland grew by 1% year-on-year in the six months to the end of December, marking the iconic stout’s first sales increase in six years.

The time period represents the first half of parent company Diageo’s financial year, and the group said net sales of Guinness fell by 4% on a global basis when measured on an annualised basis. Weaker performances in other key markets for the stout, such as Nigeria, Britain, and Indonesia, drove sales down, but the product grew in other African markets such as Kenya, where double-digit growth was noticed. Similar gains were noted in South Korea and China.

The period saw Diageo sell one of its Irish brands, Bushmills whiskey, in a $400m deal which saw it strengthen its position in spirits with the takeover of Don Julio tequila, from Jose Cuervo and gain distribution rights for Smirnoff vodka in Mexico.

However, the group’s other major Irish product, Baileys Irish Cream, saw a near 2% year-on-year sales rise in Ireland. Globally, sales of Baileys were down by 5% in the six months. However, the fall was softer in key markets such as the US, China, and Nigeria and while sales across western Europe were down by 4%, a 2% annualised increase was noted in Britain.

“Our St James’s Gate brewery accounts for 35% of global beer for Diageo and brews one billion pints per year, of which 75% is exported to over 130 markets worldwide,” said David Smith, Diageo’s country director for Ireland. “Great campaigns and positive public sentiment to our corporate and consumer brands have supported us in delivering our beer, lager, and spirit business here in Ireland.”

On a group-wide basis, Diageo’s first-half results, published yesterday, showed net sales of £5.9bn (€8bn); down 1% on a year-on-year basis. Operating profit — which includes an exceptional charge of £171m — fell by 18% to just under £1.7bn. Basic earnings per share were also down by 18%, to 52.3p, but the group upped its interim dividend by 9% to 21.5p per share.

Group chief executive Ivan Menezes said: “We have already taken action to improve the performance of those brands and markets that have not performed as well as we would expect. This contributed to our stronger second-quarter performance and I expect to maintain this momentum through the year.

“We delivered the planned savings from our global efficiency programme together with procurement benefits in marketing spend, which we have reinvested in our brands and we increased our investment in our routes to consumer, while again expanding our margins.”