Guinness and Smirnoff owner Diageo warns pub shutdown is hitting sales

Directors at the company highlighted several areas which have deteriorated in the past month following widespread lockdowns across the globe.

They also put on hold a share buyback scheme aimed at boosting the share price and scrapped all advertising and promotional spending for the company's brands, which also include Smirnoff, Captain Morgan and Baileys.

In a statement released to the stock market, the firm added: "Widespread containment actions put in place by governments across the globe in March, including the closure of bars and restaurants, are having a significant impact on the performance of our business.

"Social distancing measures, including the closure of the on-trade channels, have been introduced in most of our markets. We are tracking changes in consumer behaviour during this time and adjusting our plans and resources in response."

In Europe, Diageo also revealed that around half of all sales on the continent are from pubs, bars and restaurants. But with the UK and others closing venues, this has now collapsed, it added.

There has been a boost in sales through supermarkets, but this was cautioned with questions over whether it can be sustained longer term.

Elsewhere it said: "In mainland China, we are beginning to see a very slow return of on-trade consumption, as restaurants and bars have started to gradually reopen.

"The significant impact on global travel retail, referred to in our February 26 update, has extended beyond Asia Pacific into other markets in March due to a steep drop in passenger numbers, as well as new travel restrictions imposed by many countries."

Sales have also taken a dive in North America, India and two production sites in Nigeria have also been shut.

Despite the difficulties, Diageo said it was donating alcohol to make more than eight million bottles of sanitiser for frontline healthcare workers around the world, along with support packages for bar staff hit by closures.

To cut costs, the business said: "We are stopping A&P (advertising and promotional) spend that will not be effective in the current environment.

"We are also tightly managing working capital and deferring discretionary capital expenditure projects. We are providing an appropriate level of support to our key suppliers and customers to ensure we are strongly positioned for a recovery in consumer demand."

Editor’s note: first and foremost - and rarely have I written down these words with more sincerity - I hope this finds you well.

Almost certainly you are here because you value the quality and the integrity of the journalism produced by The Yorkshire Post’s journalists - almost all of which live alongside you in Yorkshire, spending the wages they earn with Yorkshire businesses - who last year took this title to the industry watchdog’s Most Trusted Newspaper in Britain accolade.

And that is why I must make an urgent request of you: as advertising revenue declines, your support becomes evermore crucial to the maintenance of the journalistic standards expected of The Yorkshire Post. If you can, safely, please buy a paper or take up a subscription. We want to continue to make you proud of Yorkshire’s National Newspaper but we are going to need your help.

Postal subscription copies can be ordered by calling 0330 4030066 or by emailing [email protected]. Vouchers, to be exchanged at retail sales outlets - our newsagents need you, too - can be subscribed to by contacting subscriptions on 0330 1235950 or by visiting www.localsubsplus.co.uk where you should select The Yorkshire Post from the list of titles available.

If you want to help right now, download our tablet app from the App / Play Stores. Every contribution you make helps to provide this county with the best regional journalism in the country.

Sincerely. Thank you.

James Mitchinson

Editor