DIAGEO shares slid nearly five per cent yesterday after China’s crackdown on gifting and weak beer sales in Nigeria led to lower than expected sales.
The Chinese government’s anti-extravagance measures caused sales of its white spirits brand Shui Jing Fang to drop by 66 per cent as a squeeze on the baiju market prompted rival makers to cut prices to shore up demand.
Meanwhile in Nigeria, another of its key markets, the weak economy and high inflation has prompted consumers to switch to cheaper lagers, hurting sales of Guinness and Harp.
Diageo, which generates about 42 per cent of its sales from emerging markets, said total sales rose 1.8 per cent in the first half to 31 December, following a rise of 2.2 per cent in the first quarter.
Chief executive Ivan Menezes said: “We have been operating in Latin America, Africa and Asia for decades and one of the things we have learnt is, where we have stayed consistent, investing behind our brands and route to market, while you go through shocks, you come out ahead.”
On the Scottish independence, Menezes said Diageo “won’t engage in the debate” or in “picking sides”.
However, it is assessing what the implications of an independent Scotland such as trade, currency and regulations would have on the business ahead of the autumn referendum.