Currency movements hit Diageo sales

Guy Bentley
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Diageo, the world's largest spirits maker, has reported a rise of 0.3 per cent in organic net sales growth for the nine months ended 31 March. However, organic net sales fell by 1.3 per cent for the quarter.

Diageo is having a tough time in emerging markets due to currency volatility and worries over the GDP outlook.

Volume declined two per cent and organic net sales fell by 1.3 per cent for the quarter. Adverse currency movements and the ending of the distribution agreement with Jose Cuervo hit net sales, which fell by 7.4 per cent for the nine months to 31 March.

Ivan Menezes, chief executive of Diageo, commented:

Our performance reflects the challenging environment we are operating in. Consumers in North America are most resilient, as are consumers of our reserve brands in most markets. In Western Europe the economy, consumer confidence and our business are all improving slowly but consistently.

The company said it was determined to deliver the operating efficiencies it had identified.