Guinness owner Diageo Ireland says that volumes fell slightly in the six-month period to the end of December in Ireland, while net sales decreased by 5% on the back of lower beer sales.
Diageo Ireland said that net sales of total beer fell by 6%, while Guinness sales were down 8% as the country's poor economic conditions continued to impact the drinks market. Consumers cut back on their drinking habits and the shift from the pub trade to the off-licence trade accelerated.
But Diageo Ireland's spirits division performed better with volumes up 2% and sales up 5% in the six month period. Baileys saw volume and net sales growth, led by North America and international sales. But its performance in Europe was hit by the economic slowdown in southern Europe and Iberia.
35% of all Diageo's global brewing is done in Ireland and Baileys is exclusively produced here. St James's Gate in Dublin is the second biggest brewery in Europe and brews a billion pints a year. 70% of this is exported to global markets.
Meanwhile parent group Diageo, the world's biggest producer of alcoholic drinks, said its net profits rose 18% to £1.194 billion sterling in the six months period.
Diageo, which also makes Johnnie Walker whisky and Smirnoff vodka, said the figure for the six months to December 31 compared with profit after tax of £1.016 billion during the first half of 2009/10.
'Despite the economic weakness in much of Europe, our first half performance gives me increased confidence that we will improve on the organic operating profit growth we delivered in fiscal 2010,' said chief executive Paul Walsh.
The company said that economic pressures in Greece, Portugal and Spain, and to a lesser extent in Ireland, led to a 13% drop in sales across those markets.
But sales grew 20% in Russia and the rest of Eastern Europe 'as a result of the improving economic situation and strong growth of imported spirits,' Diageo added in its earnings statement.
