One area in which sales fell was with the Smirnoff brand, due to increased direct competition from several new players in the vodka market.

The chief executive of Diageo, Paul Walsh said ;
“This has been a very challenging year, overall however our results demonstrate the resilience of our business. Our brand range and our geographic reach enabled us to deliver 4% organic operating profit growth and 10% earnings growth”

“While the economic downturn has affected all markets, the response of customers and consumers has not been uniform and therefore the impact on our business has been varied.

“By region, International, North America and Asia Pacific have been stronger than Europe. By category, we have delivered growth in categories which account for over 50% of our sales, primarily vodka, rum, tequila and beer. The gin and wine categories have been weaker and scotch and liqueurs have been most impacted by de-stocking.”

Diageo has recently been in the news for their decision to close a distillery and bottling plant in Scotland. The closures in Glasgow and Kilmarnock will lead to the loss of around 900 jobs and demonstrations are scheduled to take place in London. In response to the criticisms levied regarding the closures, Mr. Walsh added ;

“We took action quickly to manage these difficult times, reducing our cost base and refocusing marketing spend as consumer trends changed. In fiscal 2010 we will benefit from cost reductions of £120 million as a result of our global restructuring initiative.”

Diageo’s brands include several household names such as Guinness, Bells, Smirnoff, and Baileys.