Diageo’s spirits are lifted by increase in quarterly sales

The British group, which posted a 9 per cent rise in the same period in 2011, said yesterday it had made a “solid” start to its financial year in the July-September first quarter, with volume up 2 per cent.

Paul Walsh, chief executive, said: “The strength of our brands and our routes to market, coupled with the investments we have made in faster growing markets continue to drive the performance of our business.

“Growth in North America reflects our strength in US spirits and while the consumer environment in Western Europe remained challenging we delivered over 30 per cent net sales growth in the faster growing markets of Europe, especially in Turkey where we have driven share gains.

“The developed markets of Asia Pacific, especially Korea, are challenging but in the developing markets of Asia we have seen continued good performance.

“This performance together with the strong results we delivered in Africa and Latin America, and in the emerging markets of Europe has resulted in another period of double digit growth in our emerging markets business.

“As a global business we continue to be aware of the uneven nature of the global economy. However we remain confident that we will deliver our medium term goals, given the strength of our brands and our routes to market.”

Underlying quarterly sales in North America, which accounts for around a third of group sales, grew by 6 per cent. Sales rose by 16 per cent in its Latin America and Caribbean region, 11 per cent in Africa and 2 per cent in the Asia Pacific.

Europe declined by 1 per cent as double-digit percentage growth in sales across Turkey, Russia and Eastern Europe was dragged down by weak trading in western and southern regions, with consumer demand in France hit by January’s duty increases.

Underlying sales exclude the impact of acquisitions.

The maker of Johnnie Walker whisky, Guinness beer and Tanqueray gin expects half its turnover to come from fast-growing Asian, African and Latin American markets by 2015 compared with nearly 40 per cent in its last financial year.

Diageo is in talks to acquire a stake in Indian billionaire Vijay Mallya’s United Spirits Ltd, reviving an on-off courtship that would ramp up its presence in the world’s largest whisky market.

As part of its growth strategy, Diageo is also believed to be eyeing the acquisition of a minority stake in Mexican tequila maker Jose Cuervo from its owners, the Beckmann family.

Leeds-based supplier Allied Glass has welcomed plans by Diageo to invest £1bn in Scotch whisky production over the next five years to meet demand in emerging markets.