Belfast Telegraph

Guinness back in black in Ireland but Far East slowdown hurts Diageo

By John Mulgrew

Guinness sales in Ireland are on the up for the first time in six years.

But the number of drinkers opting for a pint of the black stuff across the globe has fallen overall, according to the latest figures from owner Diageo.

Sales in Ireland are up more than 1% while Baileys sales grew by almost 2%. And Guinness now has an on trade market share - which includes pubs and bars - of 18.4% across Northern Ireland.

Meanwhile, Diageo has said profits in the second half of last year fell by 18% to £1.7bn, while overall sales were down 1%.

Aside from its big beer brands in Ireland and the UK, the world's largest spirits maker reported lower-than-expected sales for the six months to December.

That was hurt by foreign exchange rates and intensified discounting on vodka in the United States - its biggest and most profitable market.

And it has also been plagued by volatility in new markets, from a crackdown on extravagant spending in China to the economic slowdown in Brazil.

In China, Diageo said sales of Scottish whisky were down 22%.

But despite a drop in half-year profits, Diageo shares rose by around 2% to 2005p yesterday.

Diageo Ireland's country director, David Smith, attributed its Irish Guinness growth in part to successful advertising campaigns.

"In Ireland, Guinness net sales were up 1%, taking the brand back to growth for the first time in six years," he said.

"Guinness grew 1.4% to a share of 8.9% in the off trade, while returning a 32.7% for the on trade.

"Growth came from increasing focus on execution in the on trade, the successful 'Made of More' campaign and other industry-led campaigns resulted in overall flat net sales in beer."

He blamed a 4% fall in global Guinness sales - across key markets such as Nigeria and Great Britain - on "difficult market conditions and price sensitivity".

"However, the brand grew in many African markets, and in Kenya the brand grew double digit driven by an increased focus on trade visibility," he said.

Just weeks ago the, global drinks manufacturer denied it had been defeated in the Irish whiskey market, after selling off Bushmills in return for a high-end tequila brand.

In November, it acquired the rest of Don Julio from Casa Cuervo in Mexico in exchange for the Co Antrim whiskey. Diageo also owns Smirnoff, Harp and Baileys.

In recent months, it also revived an older Scottish whisky brand - Haig - with the help of former football star David Beckham.

And just this week, the advertising watchdog cleared the ad campaign for Beckham's new whisky. It followed complaints that it was irresponsible for using a celebrity so popular among those too young to drink.

Belfast Telegraph