Diageo marketing spend down
Diageo says global sales increased by 15% in its last financial year despite a drop in the “challenging” European market and a reduction in marketing spend.
The drinks company, which owns the Guinness, Smirnoff and Captain Morgan brands, reported net sales increased to £9.3bn in the year to 30 June, up from £8bn in the same period last year.
European net sales dipped 5%, hit by the “worsening economic environment”. However, a faltering performance across most of the continent was offset partly by a stronger performance in Britain where net sales increased by 2%.
Diageo launched a number of campaigns for its brands in the past twelve months including the “The Spirit of Arthur Bell” campaign for Bell’s Original, the “Listen to your lips” campaign for Baileys and a Christmas campaign for Smirnoff Red. It is also recently launched a major campaign to celebrate the 250th anniversary of Guinness.
Global marketing spend dropped by 9% which the company claims was due to media deflation. In Europe, marketing spend dropped 14% to £419m driven by reductions in the “challenging” economies of Spain and Ireland.
The company has been cutting costs in the wake of the global economic downturn, which it says will save it £120m next year.
As part of the cuts, the company plans to close its Johnnie Walker bottling plant in Scotland, a move which has prompted protest from affected workers and local politicians.
Paul Walsh, chief executive, says it has been a “very challenging” year for the company but that the results “demonstrate the resilience of our business.”