Alcohol giant Diageo reports on a disappointing year
The drinks titan Diageo have blamed the Chinese government cracking down on the gifting of expensive whiskies to officials, a fall in demand for the Chinese spirit Baiju and beer drinkers trading down to cheaper brands in Nigeria and Thailand for a disappointing set of results.
To attempt to rectify this situation Diageo plan to cut their costs by some £200 million of cost cuts, pushing more expensive brands and leveraging the US recovery. Despite this, the company has some room for optimism as though sales fell 1% in reported terms, pre-tax profits rose 11% to £2.1 billion.
Ivan Menezes, the company’s chief executive, stated that it had been a “tough half” year and that he is “cautious” and about the remainder. He added: “Volatility in emerging markets is not going to go away in a hurry”.
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