Diageo toasts £10m Guinness campaign as sales climb

GUINNESS was hailed as drinks giant Diageo’s star performer yesterday as the company disclosed that the iconic brand had bucked the trend of declining British and Irish beer markets in its latest sixmonth trading period.

Uncorking an 8 per cent jump in interim operating profits to £1.4 billion, Diageo said a 20 per cent rise in marketing spending behind Guinness was a big factor in the turnaround.

Backed by a £10 million "Tipping Point" ad campaign, the most expensive in the brand’s history, Guinness sales in Britain and Ireland were up 4 per cent, while volumes were up 3 per cent.

"In Great Britain and Ireland, the success of new advertising campaigns were key factors in the improvement," the firm said.

Andrew Morgan, president of Diageo’s European division, said: "For Guinness to be up 3 per cent in a beer market in the UK that is down 5 per cent is a great performance.

"We also obviously benefited from having two months of cold and wet weather (last summer], which resulted in fewer people sliding out of Guinness and into lager."

In previous years, while Guinness sales have soared abroad, in countries such as Nigeria, it has at best had a flat performance on its home territory.

This time Guinness, which comprises half of the company’s beer division, saw international sales, from Latin America to Africa, jump 14 per cent.

In Africa, the brand also benefits from sponsoring the Africa Cup of Nations football tournament, which has just ended.

Paul Walsh, Diageo’s chief executive, said Scotch whisky, where the group is the market leader with a share of 31 per cent, was a strong performer again.

Johnnie Walker sales in the six months to endDecember climbed 10 per cent, while J&B was up 8 per cent and Buchanan’sInternational 14 per cent.

Walsh said: "Scotch whisky is now worth £80 a second in export revenue for the UK."

Scotch now accounts for nearly half of Diageo’s overall sales in its international division.

The group employs 3,500 in Scotland with distilleries and packaging sites ranging from Edinburgh Park to Glen Spey, Inchgower to Roseisle.

Diageo’s dividend rises 5.2 per cent to 13.2p.