Travel-retail boosts Diageo results

Nicole Mezzasalma

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The supplier registered an 8% increase in net sales in the financial year ending June 30 2008

Liquor supplier Diageo announced its preliminary results today [August 28] for the financial year ending June 30 2008. Net sales were up by 8% to £8.1bn ($14.9bn) in the period, with the International division—which includes Diageo Global Travel and Middle East (GTME)—contributing £1.97bn ($3.62bn) in sales, up 18% compared with last year.

Diageo GTME registered an increase of 2% in volume sales and 16% in net sales. The company said volume growth was “driven by strong performance of Scotch, especially Johnnie Walker Black Label and Johnnie Walker super deluxe labels, as a result of gifting pack promotions and successful advertising campaigns”. Price increases and mix improvements helped the division achieve double-digit sales growth, according to Diageo.

In a statement the supplier added: “The International division continues to drive overall Diageo performance as net sales of Scotch in Latin America, South Africa and Global Travel and Middle East increased by 11%, 24% and 20% respectively…Smirnoff vodka, Baileys, Cacique rum and J&B whisky sales all grew as a result of increased consumer demand and marketing spend.”

Diageo CEO Paul Walsh said: “The main drivers of top- and bottom-line growth were International, where Scotch in Latin America and beer in Africa drove net sales growth of 16%, and North America, where growth in the priority brands drove a 5% increase in net sales… The return to growth of J&B in Europe together with its strong performance in the International division delivered 9% net sales growth.

 “During the year we added Ketel One vodka, Zacapa rum and Rosenblum Cellars wine to our brand range. These are already successful brands and we intend to build on that success,” he concluded.