Steve Hawkes
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Nigeria has overtaken Ireland to become the second-biggest Guinness-drinking country in the world after Britain, thanks to a surge in sales of the famous stout throughout Africa.
Diageo, the world’s biggest drinks group, revealed the latest milestone in the history of Dublin’s most famous export yesterday and said that it was now targeting India, Korea and China.
More than 11 million cases of the black stuff are sold worldwide every year. However, the drink has taken off in Africa after the success of a “Guinness Greatness” television advertising campaign.
Full-year results yesterday revealed that Guinness sales in Nigeria rose by 18 per cent in the year to the end of June, with a 32 per cent rise in Kenya.
Volumes in Ireland fell 9 per cent as drinkers continued to opt for spirits and wine. Sales in Britain, still the largest consumer of Guinness, dropped by about 3 per cent.
Paul Walsh, Diageo chief executive, said: “We decided a while ago that the future for Guinness was the global market, given the structural decline in Ireland.” He added: “In Africa, Guinness stands for power - it has a very masculine orientation. But I think what is quite nice to see is the reverence in which the brand is held. It’s seen as having real credentials. Sir Arthur Guinness would be proud.” Sir Arthur opened the St James’s Gate brewery in Dublin in 1759, taking out a 9,000-year lease. Guinness opened a brewery in Nigeria in 1963, its first in Africa.
Mr Walsh insisted that there were no plans to close the St James’s Gate site, despite an ongoing review of its Irish operations that is expected to see Diageo relocate the brewery to Dublin’s outskirts.
Diageo reported a 6 per cent rise, to £2.1 billion, in operating profits for the year to June 30, despite a larger than expected currency hit of £91 million. Total sales increased by 3 per cent, to £7.5 billion.
Mr Walsh said that with strong growth across the portfolio, led by Guinness, Captain Morgan, Johnnie Walker and Smirnoff, he was confident that the group would now increase operating profits organically by 9 per cent in the current year - up a touch from earlier forecasts of an 8 per cent rise.
Diageo sold more than 15 million cases of Johnnie Walker for the first time, while sales of Captain Morgan increased by 10 per cent in Europe.
Mr Walsh reiterated that Diageo would be interested in taking part in the imminent auction of Absolut, the vodka brand owned by Vin & Sprit, its Swedish rival. “We will be looking at it with great interest,” he said.
Shares in Diageo closed up 24p, or 2.4 per cent, at £10.42.
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