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Rum brand boosts sales for Diageo
Spirit brands including Johnnie Walker Black label whisky helped Diageo boost sales in the UK
Demand in Britain for the rum named after Welsh born pirate Captain Morgan has helped drinks giant Diageo deliver a 5% hike in sales.
Revenues at the group, which also owns Smirnoff vodka and the iconic Guinness brand, were £6 billion in the six months to December 30, including the 15% leap in sales of the spirit.
The double-digit sales boost of Captain Morgan in the UK was helped by a television advertising campaign - "Got a little Captain in you?" - which ran in Britain towards the end of last year.
Two of the group's other leading spirit brands - Tanqueray gin and Johnnie Walker Black label whisky - also delivered double digit growth in Western Europe, the group said.
But the strongest growth was seen in the group's faster growing markets, which account for 42% of the business and grew operating profits by 21%. Overall group operating profits were up 9% at £2 billion in the period.
The group said its Western Europe business continued to grow, with Germany and Benelux delivering double-digit net sales growth, but a tax increase in France last January pushed net sales lower.
Diageo's sales in southern Europe declined 19% as its customers reduced their orders amid weak consumer demand. But Diageo said Turkey had performed strongly, despite increases in taxes and utility prices.
Diageo, which employs 25,000 people worldwide, said the results demonstrated its strength in North America, where it had seen an 8% jump in spirit sales, driven by double digit growth in whisky.
Its luxury reserve brands, which include a premium version of Johnnie Walker whisky, also delivered double digit growth in the region, after it increased marketing spend by 25%.
Overall group volumes grew 1% to £88.8 million, which chief executive Paul Walsh said had been driven by the group's expanding reach to emerging middle class consumers in faster growing markets. Shares in the group rose 2% on Thursday.
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