The trading and consumer environment in Europe has worsened, drinks group, Diageo, has warned.

In a statement this morning, Diageo said that the worsening consumer environment in Europe had resulted in a 1% drop in net sales for the first half of the year and were likely to fall further in the second half.

However, it said that its operating growth for the year to end June 30 would still be in line with the guidance of 6% issued earlier in the year.

Paul Walsh, chief executive officer of Diageo, said: “In Europe we are reorganising to face the challenges there and create a platform from which our brands can outperform and from which we can deliver operating profit growth.”

Diageo will release its full-year results for the year to end June 30 in September.