The growing thirst of emerging markets for whiskey, gin and vodka cheered Guinness and Baileys firm Diageo on 23 August as its western markets continued to suffer a debt hangover, Breaking news reported.
The group reported an 11% profits hike in the year to June 30, with spirits fuelling more than 80% of its growth as Johnnie Walker whiskey enjoyed an “exceptional” 15% sales surge, driven by strong demand in countries such as South Africa, Brazil and Asia Pacific.
And Smirnoff enjoyed double-digit growth in Africa and Latin America, helped by a marketing campaign featuring Madonna.
But its performance in western markets was more difficult, with UK net sales down 2% despite strong performances for Smirnoff Red, Guinness and Red Stripe.
Western Europe as a whole saw net sales fall 4% as the debt crisis squeezed people’s spending power, particularly in Spain, Portugal, Greece and Italy.
But with sales in emerging markets up 15% and now accounting for nearly 40% of its sales, Diageo reported an 11% rise in operating profits to £ 3.2 billion (€ 4 billion), while bottom-line profits were up nearly a third.