|Posted: February 23 2008
It’s been a good financial first half-year for Diageo with global volume sales up four per cent and net sales up seven per cent to €7.52 billion (£5.67bn) resulting in a nine per cent increase in Operating Profits to €1.87 billion (£1.41bn) in the six months to the end of December 2007. Pre-tax profits were up five per cent from €1.72 billion (£1.299bn) to €1.81 billion (£1.368bn) on the same period in 2006.
While no volume figures were given, Guinness’ net sales in Ireland grew three per cent and they gained 1.3 percentage points of share in the on-trade LAD market, supported by a slowdown in the consumer switch to the off-trade, reported Diageo which has pointed out that over 69 per cent of pub Guinness drinkers chose to continue drinking Guinness at home. Guinness is responsible for 40 per cent of the beer sold in pubs here.
Indeed the company reports share gains in both the Irish and British markets for Guinness.
Diageo Ireland’s consumer research indicates that the damp summer contributed to only a third of the growth factor, “which reflects the success implementation of key on- and off-trade marketing, visibility and sponsorship initiatives have had”.
Other brands in the Diageo Ireland stable also report a successful first half year.
Bud Lite consumption grew 36 per cent while sales of Smirnoff vodka and Bushmills whiskey grew 12 per cent and nine per cent respectively. All three claim market share gains while Diageo’s wine business reports growth of nine per cent, twice the rate of the wine market growth.
Before abandoning the project, Diageo sold three million pints of its Brewhouse series during the six months.
Globally, net sales of Guinness were up six per cent and they were up three per cent in volume. An increased marketing spend, up 20 per cent, was held responsible for these gains. In Europe, net sales of Guinness were up four per cent.
Volume sales of Baileys rose five per cent leading to an increase of six per cent in net sales on an organic basis, possibly resulting from an eight per cent increase in marketing spend for the brand. In the British and Irish market, Baileys’ net sales were up 11 per cent.