By Ian Neubauer
Diageo PLC has attributed a 34 per cent decrease in RTDs sales volume and an 11 per cent increase in sales growth of spirits to last April’s RTD tax hike.
The figures were included in the London-based drinks supplier financial report for the six months ended Dec 31, which saw it deliver $11 billion in net sales for the period.
The company said Bundaberg Rum benefited significantly from the tax hike, with a 30 per cent increase in volume and 43 per cent increase in net sales.
It also reported a 4 per cent volume growth for Smirnoff vodka attributed to the growth of Smirnoff black and a focus on the Smirnoff Flavours range, and an impressive 16 per cent growth in beers.
Diageo PLC chief executive, Paul Welsh, said the company performed admirably despite the economic slowdown but the next six months would prove even more challenging.
“Diageo’s performance in the first half again demonstrated the resilience we have from our brand range across categories, price points and geography,” Welsh said.
“[But] the global economic slowdown has affected business it the period and in November and December this impact was more pronounced. Current economic trends indicate that consumer confidence will reduce further and the outlook for the second half is more difficult to predict.”
Looking forward, Diageo PLC will implement a restructuring program designed to ensure it emerges from the economic downturn with improved routes to market, stronger brand positions and enhanced financial strength. It will include cuts of more than $200 million from overheads and the cost of goods sold.
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