The maker of Guinness, Smirnoff vodka and Johnnie Walker whisky, said sales of its RTD Smirnoff Ice in the UK would be down 3% over the year hit by a new tax imposed on RTDs last year. However, Diageo said new variant, Black Ice, was doing well since its launch. It added that Smirnoff vodka sales volumes were at “an all-time high”.
In the US Diageo expects full-year volumes of Smirnoff Ice to fall 12% amid competition and as wholesalers run down stocks.
Diageo noted that the trading environment “remains tough” and that adverse currency effects and increases in pension liabilities would hit its full-year operating profit by £110m.
Overall, the group said operating profit growth for the full-year would be “marginally better” than the 6% in the first six months of the year.
Diageo’s full-year results will be announced on September 4.