Diageo 'strong' despite dip in GB sales

Diageo has described its performance in Britain as “relatively strong” despite seeing net sales slip by 1% in the second half of 2008.

The company, which has reported a 6% increase in global operating profit to £1.6 billion, saw its European volumes fall by 5% over the period.

Benet Slay, managing director of Diageo Northern Europe, said: “In a very tough trading environment, the performance for Diageo Great Britain has been relatively strong.

“The 1% decline in net sales reflected the decline in the overall UK beer market and in ready-to-drink. This was offset by a strong performance from our spirits range demonstrating the strength and demand for our brands.”

He added: “A strong Christmas performance in the off-trade showed our spirits brands growing at 6.8% ahead of the spirits category at 6.6%.”

Slay reported that Smirnoff, Baileys and Bell’s had done particularly well and said growing demand for rosé wine had boosted Blossom Hill and Percy Fox, the Diageo subsidiary which supplies the brand.

Diageo is anticipating a challenging sales environment and is embarking on a restructuring programme designed to make £100 million of savings.

Chief executive Paul Walsh said: “We will be yet more agile in our response to changing consumer demand and we will continue to invest behind our business while achieving efficiencies across the regions, particularly in marketing spend where we are seeing strong media rate deflation.”