World sales lift Guinness after local market hit by sharp fall
GLOBAL drinks giant Diageo suffered a 10pc fall in Irish sales over the last six months of 2010, blaming the "economic weakness" and a "reduction in consumer spending".
News of the drop in local sales comes a fortnight after the UK plc told Dublin workers a planned €650m investment in new brewing facilities had been put on hold until the economy recovers.
But there was some brighter Irish news from Diageo yesterday, with Guinness proving one of the drinks giant's most resilient "priority brands" after global net sales of the black stuff grew by 1pc over the period.
In Ireland, "on trade" pub and restaurant sales were the hardest hit in the six months, falling by 14pc.
The "250 Celebration" for Guinness' milestone birthday on September 24 led to "significant brand equity improvements and share gains" for Guinness in Ireland's on trade and take-home sales, Diageo said.
Smithwick's and Harp were also singled out as strong performers in the Irish market, thanks to a new "brand positioning strategy" for Smithwick's and the launch of Harp Ice Cold, while spirits also increased their share of the "on trade".
Globally, the Guinness 1pc rise in net sales compared with a 4pc decline in net sales of vodka brand Smirnoff, a 7pc fall in net sales of Baileys and a 4pc rise in net sales of whiskey brand Johnnie Walker.
South-East Asia was the best performing Guinness region, with net sales growing 21pc, while sales rose 8pc in North America and 3pc in Europe.
The only region in the red was "International", where sales fell 10pc. Diageo's overall results showed a 3pc rise in global net sales, to just over £5.2bn and a 6pc fall in operating profits, to £1.5bn.
Chief executive Paul Walsh described the trading conditions as "challenging", as "the economic and consumer environment remained weak in many markets".
"We are in the early stages of recovery with more encouraging signs in the emerging and developing markets," he said, adding that Diageo was maintaining its guidance for low, single-digit organic operating profit growth for the full year.