DIAGEO has called on the Scottish and UK governments to protect the Scotch whisky industry in the aftermath of the decision to leave the EU.
The spirits giant, which operates 28 malt distilleries in Scotland, reported a two per cent lift in operating profit, to £2.8 billion on sales down threw per cent to £10.5bn in its preliminary results for the year ending June 30.
Volume growth of 1.3 per cent was driven by what chief executive Ivan Menezes called an “everyday focus on efficiency in each aspect of our business”.
Scotch represents 24 per cent of Diageo’s net sales and was flat in the year after growth in North America, Europe and Latin America was offset by declines in Africa and Asia Pacific, most notably in China and Korea.
And speaking to news channel CNBC, Mr Menezes said the company’s focus is on ensuring that Scotch whisky is kept healthy
“Our business is built on global trade and that to me is the most important aspect that we keep so the Scotch whisky industry and our business remains competitive and healthy,” he said.
“Our message to the Scottish and UK governments is clear: Create the conditions to keep what truly is one of the jewel of businesses in the UK and Scotland healthy and thriving.”
Scotch reserve brands net sales grew seven per cent, driven by strong growth in Johnnie Walker premium variants.
Diageo’s North American whiskey brands grew by six per cent, and rum grew three per cent, rounding off a decent year for its brown sprits.
Vodka sales grew one per cent thanks to a strong Smirnoff performance, while gin jumped eight per cent.
Beer sales grew six per cent, thanks to a strong performance in Africa.
In its home Great Britain market net sales were up four per cent. Commenting, Mr Menezes said: “This is a good set of results delivering what we set out to achieve this time last year and demonstrating our momentum.”
He added that the results pointed to a strong 2017 and underpinned his confidence in the guidance that was given for mid single-digit top line growth, and delivery of 100 base percentage points of margin improvement in the three years ending fiscal 2019.
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