Diageo finding it difficult in Europe and North America
Drinks giant Diageo has today revealed profits of just over £2.2 billion on turnover approaching £10 billion although there are signs that growth in North America and Europe is slowing. This is a company which has many famous brands including Smirnoff, Johnnie Walker, Capt. Morgan and Baileys to name but a few. So what does this show about the North American and European markets?
There is no doubt that economic concerns in Europe and North America are starting to impact across the board and many multinational conglomerates are feeling the pinch. While the sale of alcoholic beverages tends not to suffer as much as other consumables during a recession, there is no doubt that with employment markets in Europe and North America under pressure there is a distinct lack of "disposable income". This is a situation which has been ongoing for some time now and while Diageo is still showing growth in profits and growth in sales it is becoming more difficult to achieve.
The company believes that the impact of the global economic downturn is variable across the board as is the strength of any recovery. As a consequence, this year may well be a challenging year for the company but it still expects to improve on organic operating profit growth delivered this year.
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