Diageo News Update: Indian Sales Down 7%
News Updates From Diageo
Diageo News Update: Indian Sales Down 7%. It was reported recently that the world’s biggest distiller had reported business in India was doing less well.
Despite the promotion of Ivan Menezes to the position of Chief Executive Officer in July of this year, sales in the sub continent showed a loss in the latest reports filed by the UK based Drinks Company. According to the latest annual report, from Diageo the Indian arm of the business has shown a 7% drop in the sales reported for the financial year that ended in June 2013 after a 5% volume drop that was in part due to there being ‘reduced stock in trade’. These figures represent the worst sales growth figures in the past six years for the drinks giant who represent the third biggest spirits market purveyor world wide.
A Diageo representative was reported as saying that despite these disappointing results, growth in sales of brands Johnny Walker Red Label as well as Johnny Walker Black Label had recorded good sales over the second half of the year. Another of the drinks in the Diageo’ stable, Smirnoff saw revenues grow by one per cent but with a volume drop of six per cent.
Experts analysing the fall in sales shown by Diageo have put it down to the fact that the drinks giant has relied to too greater an extent on the vodka brand Smirnoff and other high end drinks when the market has seen customer’s behaviour shifting more towards economy brands. Consumers have also made the purchase of alcohol one of the areas that they cut back on to save money in tough financial times.
There has also been a slow down in the sale of Indian spirits, an area that had previously seen a growth rate of nearly 80% in the years between 2006 to 2011. Compared to those figures over the past five months the market has grown just 3% by volume. There was also the fact that the Indian government had raised duty arbitrarily making many of the high end products on sale out of the reach of the man in the street.
Updates On Diageo
Diageo however remains optimistic, especially after the deal with USL which was seen as taking the lead in the Indian spirits market. The acquisition of United Spirits is also thought likely to help Diageo achieve its aim to generate half of its income from emerging foreign markets, before the target that they set for themselves is reached, in 2105.
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