Diageo boosted by Rugby World Cup as fans choose Guinness

Guinness saw its best UK sales for seven years as drinkers watching the Rugby World Cup piled into the black stuff, drinks giant Diageo said.

Guinness sales were up 4%, the firm said, stronger than the overall 3% rise in beer sales in the six months to December 31.

But Diageo is still struggling against a weak pound, which hit first-half profits.

The Smirnoff maker reported a 1.8% increase in organic sales growth, but adverse exchange rates and asset sales, including the brand’s wines and the Gleneagles luxury hotel, cut operating profits by £156 million to £1.7 billion in the first half.

Scotch, which represents a quarter of all Diageo’s sales, was back in growth, up 10%, and beer sales are up 7%.

All six of the company’s biggest brands, including Johnnie Walker, Baileys and Tanqueray, returned to growth.

“Those are improving markets that we expect to see continue,” Diageo’s European president John Kennedy said.

The company’s luxury spirits business, which includes its premium spirits like Ciroc vodka and Haig Club whisky, saw sales in Britain rise by nearly a third.

In the United States, where Diageo is alleged to have overstocked resellers with its products, potentially boosting sales figures, operating profits were flat.

The company said it was working with the US Securities and Exchange Commission, which made a request for information about its distribution in July.

It remains confident that the US, where it makes 40% of profits, would continue to drive growth.