Diageo, the world's biggestspirits group, warned todaythat trading conditions hadworsened over the last two months, sending shares in the makerof Smirnoff vodka and Guinness beer sinking.
Chief executive Mr Paul Walsh said that trading had become moredifficult since the group's annual results in early Septemberand that the challenge of meeting its financial targets for thecurrent year was looking tough as world economies cooled.
"Today, given world events and the more difficult worldeconomic environment, current year targets do look increasinglychallenging," he said at the group's annual shareholder meeting.
Diageo shares slumped to close off 7.8 per cent at 677 pence sterling,after having been one of the best performers in the FTSE 100index before the trading update.
The slide pulled rival Allied Domecq lower. Allied shareshad risen after it posted a six percent rise in annual profits,but closed down 3.7 per cent at 370p.
Diageo, which markets Johnnie Walker scotch, Jose Cuervotequila and Baileys liqueur, reported in early September drinksales growth excluding acquisitions of nine percent andoperating profit growth of 13 percent for the year to June 30th.