By James Atkinson

The ready-to-drink category continued its decline for Diageo Australia for the six months ended December 31, 2012.

The RTD category – or more specifically the Smirnoff Signature Serves product – was called out by managing director Tim Salt as the 'achilles heel' of the business in 2011-12, a year in which the company made several related redundancies in its innovation team.

The global parent yesterday said RTD continued its decline in Australia by one per cent in the first half of 2012-13.

But Diageo Australia's net sales increased two per cent as the business continued to shift focus to spirits, which grew three per cent. 

"Diageo [Australia] continued to win share in spirits, with the biggest gains in scotch, as marketing spend focused behind super premium and investment behind reserve brands increased 33 per cent," the company said.

"The price increases put through in August resulted in seven percentage points of positive price/mix."

Globally, Diageo achieved five per cent organic net sales growth with one per cent organic volume growth.

"These results reflect the global strength of our strategic brands, our leadership in the US spirits market and our increasing presence in the fastest growing markets of the world," said chief executive Paul S Walsh.

"Our expanding reach to emerging middle class consumers in faster growing markets was the key driver of our volume growth, while net sales growth was driven by our pricing strategy and premiumisation, especially in the US."

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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