Scotland business

Diageo reports trading figures fall

Diageo, the global distiller which dominates the Scotch whisky market, has announced a fall in trading figures for the past three months.

A market update showed sales volumes down 3.5%, with their value down nearly 1.5%. Its premium or "reserve" brands were up by 10%.

Diageo said its figures were in line with expectations.

The firm accounts for 40% of Scotch production along, with a range of other spirits, Guinness and Harp lager.

It said they reflected weak demand in emerging markets, including "challenging trading conditions" in China.

Consumer confidence

The company chose to run down stocks in its east Asia markets, and to raise prices in some parts of Brazil. Currency movements worked against sales, notably in Venezuela.

Eastern Europe, including Russia, saw a decline due to weak consumer confidence and uncertainty over events in Ukraine.

As a result, Asia Pacific sales were down 7.4% in July, August and September. North America was the only region to see any growth, and that was weak.

Diageo chief executive Ivan Menezes said: "In North America, consumer demand for mainstream brands is still constrained by weak consumer confidence in average income households while our reserve brands and our innovations continue to perform well, as they do globally.

"Western Europe is now stable and I continue to expect full year performance to be flat although there will be quarterly fluctuations around that level.

"Emerging markets' performance remains weak with further currency weakness in a few markets and specific geopolitical situations in some areas. However our brand performance has been strong in many markets including Turkey, East Africa, India and Colombia."

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