Drinks maker Diageo feels Emerging Markets Crackdown
A slowdown in key emerging markets has hurt the world’s largest drinks company. Net sales for the six months to 31st December were up 1.8% vs 2.2% for the previous six months.
The group blamed more challenging conditions over the period as China’s austerity measures hit sales of their white spirit baiju. Beer sales in Nigeria also declined as drinkers opted for cheaper lagers as household income were squeezed as a result of low government spending and high domestic inflation.
Diageo plans to reduce costs by £200m a year by 2017.
The next two months will see CEO, Ivan Menezes, simplifying the organisation. £3bn has been spent by Diageo over the last four years in acquisitions, and the restructuring will see one-off £200m-£250m costs.