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Sales volumes down 6% at Diageo Ireland

Sales volumes fell six per cent at Diageo Ireland while net sales values fell eight per cent, driven primarily by the weakness of the key on-trade channel, according to the company’s preliminary results for the year to 30th June.

Sales volumes fell six per cent at Diageo Ireland while net sales values fell eight per cent, driven primarily by the weakness of the key on-trade channel, according to the company’s preliminary results for the year to 30th June.
The company was however able to report share gains for its on-trade beer and spirits sectors despite a net sales decrease of five per cent for Guinness, in line with the market. Indeed the stout brand continued into “the 30th month of consecutive share growth” in the on-trade, up 0.6 per cent to 32.6 per cent, according to Diageo, driven partly by the success of the ‘250th Celebration’ campaign.
“In Great Britain and Ireland, Guinness once again gained share but net sales declined as a result of the continued decline of beer in those markets,” Diageo reported.
“There has been a shift in market trends in the second half of the year however, with the on-trade markets in both RoI & NI slowly recovering,” added Diageo, “The same trend is also happening in on-trade spirits with RoI moving from -14.4 per cent in July ‘09 to -9.8 per cent and NI shifting from -18 per cent to -8 per cent.”
Harp and Smithwicks also grew share with Carlsberg performing “broadly in line with the market” while Budweiser lost share.
The off-trade here has also seen a recovery in both LAD and spirits in the second half.
Globally, Guinness, which generates around £1 billion in net sales, witnessed a three per cent organic increase in volume although European volume sales were down four per cent with value down two per cent.
Global sales of Baileys fell one per cent in volume and four per cent in value during the year. However volume was up three per cent with net sales down by the same in Europe. According to Diageo, the cream liqueur put in a strong performance in Great Britain, its largest European market, with volume and net sales up 17 per cent and five per cent respectively, driven by the double-digit growth in the off-trade and the rapid growth of Baileys Flavours.
Smirnoff volume was flat and net sales were down six per cent.
“This performance was driven by the sharp decline of the vodka category in Ireland and heightened competition in Poland, where local vodka brands returned to popularity during the economic downturn. Despite the difficult context, Smirnoff grew share in Ireland, driven by the on-trade and extending its market leading position. “
Smirnoff has now attained 68.2 per cent of all-island value in the vodka category, up 1.8 share points year-on-year, according to Diageo.
Generally, Diageo reports that the Long Alcohol Drink (LAD) market in the on-trade has been declining faster than the off-trade, driven by retailer pricing and long-term consumer trends with the RoI on-trade beer market falling six per cent and the spirits market by 10 per cent.
“The weaker trade conditions in Southern Europe and Ireland impacted overall marketing spend as campaigns were reduced in line with consumer trends,” reported Diageo.
Globally, Diageo delivered a five per cent organic net sales growth in beer and posted pre-tax profits of €2.7 billion (£2.2bn), upnet sales of €11.98 billion (£9.8bn) up five per cent from €11.4 billion (£9.3bn) the previous year.

 

 

 

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