UK-based drinks major Diageo has reported a drop in sales growth during the first half (H1), primarily due to decrease in demand in China and other emerging markets.
The company has witnessed a 1.8% rise in net sales for the first half, following growth of 2.2% in the first quarter during the prior year.
Sales in North America was up by 4.6%, but fell in western Europe by 1%. Sales in emerging markets rose by just 1.3%, impacted by weakness in baijiu in China and Nigeria.
The maker of Johnnie Walker whiskey, Smirnoff vodka and Guinness beer, reported 2.9% increase in operating profit with 0.4ppts of operating margin improvement.
Diageo has reported a strong growth in super and ultra premium brands, while reserve brands up by 18.5%.
Diageo chief executive Ivan Menezes said that the company has continued to demonstrate the strength of its broad portfolio and diverse global business in a period which saw a more challenging emerging market environment.
"We continued to invest in the business increasing marketing spend ahead of net sales growth and keeping our strong focus on innovation and route to consumer improvements," added Menezes.
