Guinness boost in Britain amid flat sales in Ireland

Brewing and spirits giant Diageo increased sales in Europe helped by Guinness and Baileys in Britain in the second half of 2019, even as overall beer sales fell back in Ireland

The company posted a 2% rise in net sales in Britain in the six months to the end of December as Guinness, Baileys and Captain Morgan benefitted from digital marketing campaigns.

In Ireland, the company said that net sales fell by 1% in the period, with Guinness posting flat sales and overall beer sales down by 2%, despite growth for its Rockshore lager drinks. Its sales of spirits, boosted by vodka and rum, increased 1% in Ireland, however.  Promotions also boosted sales of Baileys in Northern and Central Europes, while North American sales grew 6%, helped by sales of spirits.

However, Diageo lowered its outlook for global sales growth, amid risks facing the industry from global trade conflicts and the coronavirus outbreak.

Chief financial officer Kathryn Mikells told reporters it was too soon to see what impact the coronavirus will have on business in China, where Diageo owns the Shui Jing Fang baijiu brand and has opened retail outlets for its Johnnie Walker Scotch whisky. Sales grew 24% in the market last year.

Diageo has suspended travel to China, and ensuring the safety of staff in that country is the main priority, she said, adding that the mainland accounts for about 4% of total revenue.

Its shares fell by over 2% in London and have gained 12% in the past year.

"We remain focused on building the long-term health of our brands, supported by data-led insights and a culture of everyday efficiency," said chief executive Ivan Menezes.

Additional reporting Bloomberg