Tale of two halves as Guinness sales fall

Guinness volumes fell by 5% in the pub market while Smirnoff Ice lost 13% in the 12 months to June, owner Diageo has revealed in its full-year results. "Guinness performance has been a tale of two halves," said spokesman Paul Flanagan. "The first-half performance was quite weak, but in the second half, there was a lot of spent with the new ad campaign and other activity. "We expect the new ads [released this week] will also have a big effect." Smirnoff Ice remained the number-one RTD, with its market share growing from 26.7% in April 2003 to 28.6% in April 2004 (AC Nielsen figures), despite the steep sales fall. Flanagan said: "I think that in the RTD market, a lot of brands are coming out of the category. Particularly in the on-trade, the stronger brands are getting stronger. In the average pub the range has been reduced and there is a focus on brands that have money put behind them." He added: "[The RTD market] is still a massive category, worth £1.2bn. There has been a decline and shake-out, but there are opportunities." Meanwhile, Smirnoff vodka had a cracking year with volumes up 19%, exceeding 3 million cases for the first time in a trading year. Elsewhere Diageo cited the success of Bailey's Glide, the RTD version of the liqueur, launched in the on-trade in February, for helping overall Bailey's sales rise 5%. And the Blossom Hill wine range saw volumes up 37%, with the red and white blends becoming the best-selling red and whites of 2004. Profits excluding one-off items fell to £1.46bn from £1.48bn with turnover down 4% to £8.89bn.