Diageo sales jump as drinkers choose luxury spirits

Sales surged at Johnnie Walker maker Diageo after drinkers celebrated the easing of lockdown restrictions by splashing out on high-end spirits.

Shares in the company, which also owns major brands including Guinness and Pimm’s, ticked higher on Thursday morning.

Diageo revealed net sales grew by 21.4% to £15.5 billion over the year to June 30, compared with the previous year.

The group said just over 11% of this growth was due to higher prices and customers choosing to buy more expensive drinks.

It was also buoyed by the continued recovery of pubs, bars and restaurants – known as the on-trade – after the easing of pandemic restrictions.

As a result, Diageo’s operating profit increased by 18.2% to £4.4 billion for the year, towards the top of market forecasts.

Chief executive Ivan Menezes said: “In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams.

“Our net sales growth was across categories.

“We benefitted from the on-trade recovery, continued global premiumisation trends, with our super-premium-plus brands up 31%, and from price increases across our regions.”

The group’s European operation witnessed a 26% jump in sales, with sales across Great Britain up 20% for the year.

Beer sales were strong as the reopening of pubs helped drive a 52% jump in British Guinness sales.

It also highlighted at 12% increase in spirits sales in Britain, driven by rises across vodka, rum, Baileys and scotch.

However, it highlighted a “decline” in gin after the recent boom in demand appeared to stall.