Diageo is responsible for brands including Johnnie Walker whisky and Guinness has said its had grown by 1,8 % in the first half of 2013 much slower than the previous growth of 2.2% in the first quarter. Total emerging market net sales rose 1,3% and North American sales were up 4,6% but Western Europe saw a drop in sales of 1%.
Within its portfolio, super and ultra premium brands grew strongly with reserve brands up 18,5%.
Beer was the only category to decline, down 2,6% with weakness in Nigeria and Ireland.
Ivan Menzes, who took over as chief executive of Diageo six months ago, said the company had fared well in a period which saw a “more challenging emerging market environment”
Increased sales in the US and “improved” performance in Western Europe, he said, allowed the company to “absorb” current challenges in some emerging markets. He said “We reacted quickly to the changing emerging market environment, reducing inventory levels in several key markets, which led to weaker Quarter Two, and tightly managing our cost base to deliver improved margins in line with our expectations. We continued to invest in the business increasing marketing spend ahead of net sales and keeping our strong focus on innovation and route to consumer improvements. The clarity of focus at a market level enables me to take changes I have already made to the operating model to the next level.” He said detailed plans would be laid over the next few months in a bid “to simplify our processes and delayer our organisation to create more agile, accurate and effective organisation.”