By Ian Neubauer
Figures from Diageo’s preliminary results for the 2008-09 fiscal year have confirmed claims that the RTD tax hike has boosted straight spirit sales in Australia.
“Diageo’s RTD brands performed strongly in Australia prior to the 70 per cent duty increase which was implemented on the RTD segment at the end of April 2008,” the UK-based distributor said in a statement.
“Since the increased duty was introduced, net sales of RTDs have declined, partially offset by net sales growth in core spirits.”
Diageo reported a year of strong organic growth, with global net sales up seven per cent and operating profit up nine per cent for the period.
But the distributor was less fortuitous in the Asia Pacific Region, where operating profit fell 12 per cent as a result of a number of independent factors.
Market share for its hero vodka brand Smirnoff continued to grow in the region, with net sales up 29 per cent and gains in the key markets of India and Australia.
Diageo’s global marketing spend increased five per cent in the period, while marketing spend on non-RTD brands increased by 8 per cent.
Diageo announced it would focus on priority brands in Australia but acknowledged profits looking forward would be held back if the RTD tax hike is not rejected by the Senate.
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