Diageo has a slump hangover

Recession-hit Britons and Europeans have not turned to drink for solace according to figures from the world's biggest spirits group Diageo today.

Shares in the Guinness, Johnnie Walker, Gordon's and Smirnoff maker fell 4% as analysts said it had slightly missed their targets and not suggested any upgrade for the remainder of the year.

British sales of Guinness dropped 2% in the last six months as the continuing closure of pubs - still running at 29 a week - could not be made up for with flat supermarket and shop sales.

Around three-quarters of Guinness is sold through the on-trade.

With Smirnoff, two-thirds of sales are through the on-trade, and Diageo had to fund heavy promotions in a very competitive market for vodka through the supermarkets while also spending on spreading the word about new flavoured Smirnoffs.

British sales fell 16% with the added effect of retailers stocking up ahead of last summer's emergency Budget.

In Europe, scotch whisky sales were particularly hard hit in Greece, Iberia and Ireland.

Further afield, North American sales recovered and are continuing to grow, while Asia, Latin America and Africa all demonstrated double-digit growth.

The group's finance director Deirdre Mahlan said: "In short, our results reflect the different states of the world's economies and consumer sentiment."

Diageo's total sales rose by 2% to £5.3 billion, while pre-tax profits were up 16% at £1.6 billion. The shares lost 47p to 1206p.