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North American trading helps to boost Diageo sales

Press release   •   Apr 18, 2013 10:47 BST

Diageo announced on Thursday that key emerging markets were showing weak consumer trends as the world's largest distiller by revenue posted slowing sales growth, even as trading remained robust in North America, its largest and most lucrative region.

The London-based drinks company said its third-quarter sales rose 4 percent excluding acquisitions, disposals and currency effects, compared with a 6 percent rise in the same period last year. Volumes in the quarter fell 1 percent.

For the first nine months of its financial year, meanwhile, the organic sales growth figure was 5 per cent, in line with its performance in the first half of the year.

Prices increases since May 2012 have boosted the value of its US spirits arm, which includes the Smirnoff, Johnnie Walker and Captain Morgan brands, though its Western Europe sales fell amid the ongoing economic difficulties in the area.

Diageo's South Korean arm was affected by the decline of the local Scotch whisky market. Diageo said trading in Nigeria had weakened slightly, as anticipated, while its Brazilian arm was hit by "consumer weakness".

Diageo's North America sales were up by 6 percent. Its Western Europe business saw sales drop 4 percent. Africa, Eastern Europe and Turkey sales lifted 9 percent, as Latin America and Caribbean sales grew 14 percent and Asia Pacific was up 4 percent.

"Strong performance from our biggest business, US spirits; the continued growth of spirits in Africa; share gains across our markets in Asia Pacific and double digit growth of Johnnie Walker, Crown Royal, Buchanan's, and Tanqueray are the highlights of the quarter."

"Given our market positions and geographic diversity we remain confident that Diageo's performance continues to be in line with our medium term guidance," said Diageo chief executive, Paul Walsh.

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