Diageo sales rise but Europe lacks fizz

14th Oct 2010 11:15

Drinks giant Diageo posted a rise in sales in the third quarter, but warned of weakness in Europe, particularly ailing economies such as Greece and Spain.In the three months to 30 September, the maker of Guinness and a host of spirits including Smirnoff vodka and Johnnie Walker whisky saw net sales total £2.06bn, up 5% on an organic basis from £1.95bn in the same quarter the previous year. Chief executive Paul Walsh said the performance was in line with expectations. The company reiterates its guidance for improved organic operating profit growth over the full year.'As expected we face a challenging trading environment in Greece and in Spain net sales were down markedly in comparison to the first quarter last year when there was a buy in ahead of duty increases,' he said. 'Northern Europe again delivered good net sales growth and Diageo's business in Russia continues to grow strongly.'He added: 'Overall, however, the consumer environment in Europe is slightly weaker than we experienced in the prior year.'Strong growth in Asia Pacific helped drive the overall performance and the company continues to increase marketing spending to promote its brands globally.