Sales of Guinness in Ireland fell in the six months to the end of December, according to the latest results from its British parent company, Diageo. A slowdown in the overall Irish beer market led to a 3 per cent drop in the volume of Guinness sales in Ireland in the period, Diageo said. Worldwide sales of Guinness rose by 2 per cent.
Total beer sales in Ireland were flat for the six months, Diageo said. Beer sales - Guinness and its other ales and lager brands - in the Republic were 2 per cent stronger, according to Guinness Ireland. The company declined to break out its Guinness brand sales, though it is understood that the fall in Guinness sales was sharper in Northern Ireland than in the Republic.
Diageo's Baileys operation produced a strong first-half performance.
Asked about speculation that Guinness Ireland may be demerged from the Diageo group, managing director Mr Brian Duffy said the issue was "not on the table".
While the food and drinks group reported better than expected interim pre-tax profits of £1.09 billion sterling (€1.75 billion), up 3.4 per cent, no profit figures for the operation in the Republic were disclosed. Overall sales growth at 2 per cent was lower than in recent years but this was a "satisfactory" performance in a mature market, according to Mr Duffy. Millennium sales met expectations, he said. The group was on target "to deliver growth and achieve our full-year targets". Guinness would continue to invest to improve its products and introduce new products. Employment remained at 3,000 and, while no further cuts are planned, the group was constantly striving to improve efficiency, he said. Its €12.7 million annual investment in ensuring that customers "get a perfect pint in every pub in Ireland" is continuing, he said, while the €38 million investment in redeveloping the old brewery at St James's Gate as a visitors' centre was producing a new business for the group. This business would generate a profit after financing costs and would attract customers to our brands. "It is a serious business proposition and has been created and managed on that basis," Mr Duffy said. Scheduled to open later this year, he expected the centre to attract more than one million visitors each year.
Mr Duffy said it was too soon to comment on the outlook for its newest product, Breo white beer, but the group was encouraged by the market response.
Good performers among the brands were the lagers Budweiser and Carlsberg and draught Guinness in a can. Lager sales were driven by heavy marketing promotion, including the Clydesdales and the Frogs and Lizards advertising campaigns. Exports of Guinness to the US rose by 10 per cent. Budweiser produced the fastest beer sales growth in the Irish market, according to Mr Duffy, while sales of Carlsberg rose by 4 per cent. Sales of draught Guinness in a can rose by 22 per cent while Smithwicks continued to reverse the decline of recent years. But sales of Harp continued to decline in the Republic, though it continued to be the fastest-growing beer in Northern Ireland.
Sold in 130 countries, Baileys achieved double digit sales growth with a 15 per cent rise by volume and 20 per cent by value. Bailey's managing director Mr Frank Fenn, said the brand, which has now been on the market for 25 years, was "still performing like a young colt". Sales continued to rise in all its markets, with strong growth in its core markets of Ireland, Britain, the US and Spain. Significant growth potential remained in new markets and among core customers, who were only drinking one to two glasses of Baileys per month, he said.
