China slowdown and market volatility see drinks giant post weaker earnings

Diageo, the world’s largest distilled drinks maker by sales, posted weaker- than-expected earnings yesterday, hurt by a slowdown in China and volatility in other emerging markets.

Over the last year, the maker of Johnnie Walker Scotch whisky, Smirnoff vodka and Guinness stout has grappled with a host of issues in emerging markets, including currency devaluations, a tax increase on one of its beers in Kenya and a steep decline in sales of Chinese baiju spirit, due to government-enforced austerity measures.

That decline led the company to take a writedown on the value of its business, worth about £79m (€99.6m) on a net basis.