SALES OF Guinness fell by 5 per cent in Ireland last year but the stout continued to gain market share as the overall beer market here fell sharply due to the recession.
This emerged yesterday from the annual results of Guinness’s multinational parent company Diageo.
No financial results were given for the Irish business, which employs some 2,000 workers here. However, Diageo said its volumes declined by 6 per cent in Ireland in the 12 months to the end of June, while net sales were 8 per cent lower.
Guinness in Ireland is believed to account for about 15 per cent of Diageo’s £1 billion global sales of the stout. The share gains in Ireland mean that about one-in-three pints sold here are Guinness.
At a press conference in London yesterday, Andrew Morgan, the head of Diageo’s European business, said the global drinks group was bracing itself for a further tough period of trading in Ireland in the current financial year.
“I think yesterday’s [Wednesday] situation on the credit rating on sovereign debt is one of the first indications that this is indeed going to be a long, slow road to recovery in Ireland,” Mr Morgan said.
“That has been very much in our plan. No one here has expected a rapid turnaround in the Irish economy, so we’re planning on it taking certainly well through the financial year that we are working through now.”
Mr Morgan said the Irish beer was currently down about 4.5 per cent. “We’ve relaunched Smithwicks and Harp, which are enjoying a bit of a renaissance. We can continue to outperform the market but the market will be in decline again in the current financial year.”
Diageo Ireland managing director John Kennedy said the Arthur’s Day celebrations in September 2009 had resulted in 750,000 people visiting the pub on the Thursday night in question.
This compared with 250,000 on a normal Thursday night and saw sales of Guinness pints treble to about 1.5 million.
Guinness’s top three markets are now Britain, Nigeria and Ireland, although all of these markets experienced difficult trading in the past year due to weak economies.
Baileys also had a difficult year with net sales declining slightly. However, the company said its performance had picked up since last Christmas and it was now planning a major marketing push.
“Baileys is the one brand that is most responsive to advertising,” Mr Kennedy told The Irish Times.
Globally, Diageo achieved a 5 per cent increase in net sales to £9.8 billion. Its operating profit rose slightly to just shy of £2.6 billion, but strong cash generation resulted in the company increasing its dividend by 6 per cent.
Chief executive Paul Walsh said there were “some signs of recovery” in North America, while Europe was “mixed”. The company has experienced strong growth in Asia and is also positive about the potential for growth in Africa, although Guinness sales there appear to have flatlined.
