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Diageo wine sales up 20% in Great Britain

Diageo wine sales have grown 20% in Great Britain over the last year - led by Blossom Hill and innovative launches in the grocery sector.

The drinks giant released its global results to the end of June 2010, showing a stronger second half performance driving full year growth.

Net sales in the second half were up 6%, driving 2% organic net sales growth. Full year net sales rose to £9.8million from last year's £9.3million.

Pre-tax profit rose to £2.2 million compared with £1.99 million previously. Market consensus for profit before tax was £2.3 million on revenue of £9.7 million.

Paul Walsh, Diageo chief executive, said the firm's "performance in developing markets drove overall growth while markets in North America and Europe remained weak".

While nearly 85% of Diageo?s wine net sales are in North America and Great Britain, sales in North America declined by 6% due to net discounting nad consumers trading down. Butthere was a very strong performance in Great Britain where Diageo increased share and grew wine net sales 20% led by Blossom Hill and innovation launches, particularly in the grocery channel.

Spirits showed a stronger performance in scotch in the second half, led by strong growth in developing markets and by the recovery in global travel and Middle East, resulted in full year net sales growth of 5%. Sales of premium brands Ketel One and Ciroc vodka partially offset the net sales decline on Smirnoff. Volume and net sales of Diageo?s vodka brands declined 1%.

Rum brands increased 3% fuelled by the geographical expansion of Captain Morgan, Zacapa and other Diageo rum.

"We increased marketing in growing categories, delivering 5% organic net sales growth in scotch and 5% organic net sales growth in beer, and in growing markets with organic marketing spend up 13% in International, and behind our leading brands especially Johnnie Walker, Smirnoff and Captain Morgan", said Walsh.

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