Global Processing

Diageo Sees Whiskey Sales Rising

April 14, 2008
The Associated Press is reporting that Diageo PLC, the world''s largest producer of alcoholic drinks, said recently it expects its Scotch whiskey business to grow at least 8 to 9 percent annually, amid growing demand from emerging markets in Asia and Latin America.

Diageo is the leading player in the Scotch whiskey industry, producing the world''s two top brands, Johnny Walker and J&B whiskies.

Charles Allen, who is in charge of company''s Scotch whiskey strategy, noted growth has been in the 8 to 9 percent range for the past few years, reversing an earlier slump in the spirits'' popularity.

In the last financial year Diageo produced 33 million cases of Scotch whiskey, and the spirit accounts for almost half of the company''s international business.

The company did not provide a breakdown, but its overall sales for the six months ending Dec. 31 were 4.3 billion pounds ($8.4 billion) -- a 6.6 percent increase from the previous year.

Bryan Donaghey, managing director of Diageo Scotland, said the company is partly insulated against the recent sharp increases in cereal prices -- cereal grains are whiskey''s main ingredient -- because it can absorb costs over several years.

This year''s cereal bill for the company will be spread over the years that that the cereal is used for distilling.

The company has said it expects its whiskey sales to be sheltered from any downturn in consumer spending caused by the global credit crunch, arguing its product are an "affordable luxury" that consumers are unlikely to give up.