With the decline of Guinness in the rural on-trade here, Ireland became the key driver of a four per cent decline in beer sales in Europe, negatively affecting overall performance of the brand.
Here, one in every three pints of beer sold in the on-trade (32.5 per cent) is a Guinness.
Beer represents over 80 per cent of Diageo Ireland’s net sales but according to the company, “core consumers reduced their consumption frequency and the shift to the off-trade accelerated resulting in a share loss of Guinness of 0.2 percentage points”.
Following a reduction in cross-border trade, spirits fared somewhat better with volume growing two per cent and net sales up five per cent, which got the company some share gain in what was a declining market.
“Captain Morgan grew net sales double digit and remained the fastest-growing spirit brand in Ireland,” reported Diageo.
Overall, a five per cent decline in net sales on an organic basis was matched by a one per cent decline in overall volumes at Diageo Ireland in the six month period.
However the company still retains 42 per cent of the Irish alcohol market. In fact Ireland remains Diageo’s third-largest market, generating around seven per cent of Diageo’s global trading profit while Dublin-brewed Guinness generates over €1 billion in net sales, contributing over 12 pr cent of Diageo’s total net sales.
European volumes overall declined two per cent with a three per cent drop in net sales despite a one per cent increase in marketing spend.
Globally, Diageo grew organic net sales by four per cent to £5.2 billion (€6.2bn) with volumes rising three per cent.