Guinness owner Diageo's Irish sales decimated by pub and hotel closures

But spirit sales are up by 4%, with Baileys, Gordon’s gin, and Captain Morgan rum driving growth

Global sales of Guinness fell by 18% in the second half of 2020, mainly due to Covid-driven pub closures in Ireland and the UK.

Guinness and Baileys owner Diageo saw its net sales in Ireland fall by nearly 40% in the six months to the end of December due to Covi-19 restrictions decimating on-trade.

The six-month period comprises the first half of Diageo’s financial year. Diageo said organic net sales in Ireland fell by 37% in the first half, with sales down by 40% on a reported basis.

However, the global drinks giant said spirit sales here grew by 4%, with Baileys, Gordon’s gin, and Captain Morgan rum driving growth. Diageo said it grew its share of the Irish off-trade market with spirits and beer selling well.

Its net beer sales in Ireland fell 44%, overall. Beer makes up 15% of Diageo’s total net sales, but the group’s global beer sales fell 11% in the first half.

Guinness sales dropped by 18%, globally, mainly due to pub and hotel closures in Ireland and the UK because of the pandemic.

On an overall global basis, Diageo saw first-half organic net sales creep up 1%, versus previous expectations of a near 5% drop. That was driven by a 12.3% rise in North American sales. Sales in Northern Europe also rose by 7%.

On a reported basis, however, Diageo’s first-half sales fell by 4.5% to just under £7bn (€8bn).

"We expect ongoing volatility and disruption in the second half of the year, particularly in the on-trade channel, which will make performance more challenging," said group chief executive Ivan Menezes.

Mr Menezes said, overall, Diageo delivered “a strong performance in a challenging operating environment”, returning to top-line organic sales growth during the half.

“We rapidly pivoted to the channels and occasions most relevant to consumers and invested behind new opportunities. This more than offset the impact of on-trade restrictions and the decline in travel retail,” he said.

North America, our largest market, performed particularly strongly and ahead of our expectations. Consumer demand has been resilient and the spirits category continues to gain share of total beverage alcohol. Across other regions we delivered strong sequential improvement.

Diageo has not given any revenue guidance for its current year due to the ongoing volatility caused by the Covid crisis.

However, it expects the second half to show a year-on-year improvement and to see continued momentum in North America.