Downturn hits Diageo's wine sales

Premium wine sales have been badly hit as customers rein in their spending, the world’s largest drinks company reported today.

Diageo, which owns wine brands including Barton & Guestier, Piat d’Or and Blossom Hill, announced wine sales fell 5% while its spirits arm reported postive growth.

Wines above $25 have been hardest hit as consumers trade down with Napa winery Chalone suffering. In response to reduced consumer spending, Diageo has launched new products under $10.

In Europe, total wine sales increased slightly driven by strong UK sales of Californian brand Blossom Hill.

Paul Walsh CEO Diageo, admitted the wine category had been ‘weaker’ than spirits in the current economic climate and was realistic about the coming year.

‘While the global economy appears to be stabilising, there is still uncertainty as to the sustainability and pace of any recovery and 2010 will be challenging,’ he said.

The company posted a 7% rise in annual profits thanks to favourable currency exchange rates and cost cutting measures despite tough trading conditions.

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Written by Rebecca Gibb

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Rebecca Gibb MW is a wine journalist and editor who has also founded Bamboozled games, ‘the world’s first wine and spirit puzzle makers’. Having spent six years living in New Zealand, she has recently returned to her native north-east England. While in New Zealand, she became a Master of Wine, graduating top of her class and winning the Madame Bollinger medal for excellence in tasting. A former winner of both the UK’s young wine writer of the year and the Louis Roederer Emerging Wine Writer, her first book The Wines of New Zealand was published in 2018. She also runs wine events and has her own consultancy business The Drinks Project. She was a judge at the 2019 Decanter World Wine Awards (DWWA).