The world's biggest spirits makers Diageo and Pernod Ricard beat forecasts today with strong sales growth in the first three months of 2011 as buoyant emerging market growth offset a weak Europe.
Both gained from growth in Asia, Latin America and Africa and gradual recovery in North America which helped to offset weakness in Europe, hit hard by tough economic conditions in Greece, Ireland and Spain.
The figures mark a continued improvement in trade, which picked up in 2010 after suffering throughout most of 2009 when the global downturn prompted consumers to move to cheaper drinks and wholesalers to use up stocks rather than make new orders.
World number one spirits group Diageo, the maker of Guinness, Smirnoff vodka and Johnnie Walker whisky, said that underlying sales rose 7% for the months between January and March, beating forecasts.
French rival and world number Pernod, which makes Jameson whiskey, Absolut vodka and Martell cognac, reported quarterly underlying sales up 5%, well ahead of the 2.5% predicted.
Both reaffirmed their targets for the current year. Diageo said it was looking to beat last year's operating profit rise of 2% for the year to the end of June 2011 and Pernod said it was aiming for an annual profit rise close to 7%.
Diageo chief executive Paul Walsh said although trading in Europe was challenging, North American consumer trends were improving and its emerging markets were driven by the strength of its scotch whiskies especially around the Chinese New Year.
Pernod chief executive Pierre Pringuet said the group recorded strong sales growth of 15% in emerging markets and saw flat sales in mature markets during the quarter.
