Diageo on track with 2007 ambitions

The company increased marketing spend in Europe in the second half and in Asia Pacific, according to an earnings guidance issued 28 June. Diageo chief executive officer Paul Walsh remained encouraged by the group's improved sales despite some difficulties in marketing costs. "The strong performance, which was delivered in North America and international in the first half, has continued for the full year,"​ he stated. "In Europe and in Asia Pacific, top line performance has improved against the first half as marketing investment was increased in the second half behind our growth brands and markets." ​ Spirits continued to act as the company's major income source for the year, with strong sales of its top scotch whisky ranges in particular. Internationally the US was a key market for sales growth, with premium spirits brands still performing strongly despite a slowdown in the market for growth, the company said. Wine also showed encouraging growth for the group. Similarly, Brazil and Africa also helped the group forget its woes within Europe, by offsetting declines within the bloc through the company's ready to drink and beer segment. An increased spend on marketing was attributed to an improving performance of its brands within the Asia-Pacific region as well. Europe underwent disappointing sales within the group's ready to drink ranges, compounded by increased spending on marketing. It remained confident though that the overall potential for its brands in Eastern Europe as well as strong growth within its Russian operations would yet bring a turnaround to the division. The group's core Guinness brand continued to perform well internationally despite troubles in the more established markets within Ireland and the UK. The performance of the brand failed to quash speculation this week that it may yet move to sell off the core dark beer in the near future though.