Diageo: Middle classes switch drinking away from the pub

Drinks giant Diageo has warned that the slowing UK economy would lead to more middle class people drinking at home rather than at the pub.

Chief executive Paul Walsh said: "We are not seeing the middle classes move away from drink.

"The middle consumer group is under pressure but what we're seeing there is a migration from the on-premise to the off-premise. For the average person of 35 with a young

family and household income of less than £40,000 a year, a night out at the pub these days is expensive.

"We have to capture that off-premise occasion."

Diageo Europe, which includes the UK, saw full year volume up 2% and net sales and operating profit each up 3%.

A strong performance in Great Britain was driven primarily by Smirnoff vodka, Baileys Irish cream liqueur and Blossom Hill wine.

Guinness also carried through its solid performance from the first half of the year delivering net sales growth for the full year.

Benet Slay, managing director of Diageo Great Britain, said: "Smirnoff had an excellent twelve months, up 10% in volume and +9% in value.

"In spite of one of the toughest ever years for the beer category, Guinness grew sales +2% with the brand performing ahead of the market in both the on- and off-trade.

"In the on-trade Guinness delivered flat sales, well ahead of the beer market decline of -5% and also enjoyed its highest ever category share at 7.4%. In the off-trade the brand experienced growth of +5% ahead of the total beer market at -1%."

Diageo reported operating profits of £2.2bn for the year to 30 June.