Diageo increases global marketing spend by 8%

Guinness: spoof ad for 'Guinness Clear' encouraged drinking of water
Guinness: spoof ad for 'Guinness Clear' encouraged drinking of water

Drinks brand has invested in gin and beer categories in Europe.

Diageo has reported global net sales of £12.9bn, up 6% organically year on year, with marketing spend rising 8% to £2bn.

The owner of drinks brands including Guinness, Johnnie Walker and Smirnoff, revealed in its preliminary results for the year ended 30 June today that "a culture of everyday efficiency" has helped it invest more in marketing.

The biggest growth in marketing investment has been in North America, where it was up 11% (£75m) to around £680m. In Europe and Turkey spend rose 6% (£26m) to around £430m, which Diageo said was "largely driven by increased investment in beer and gin" and the Guinness sponsorship for the Six Nations rugby tournament.

In Europe Diageo reported net sales up 3% driven by growth in continental Europe, Great Britain and Ireland. The brand pointed to gin brands Tanqueray and Gordon’s, which achieved double-digit growth.

Ivan Menezes, chief executive, said: "Our focus on quality sustainable growth is backed by a culture of everyday efficiency that enables us to invest smartly in marketing and growth initiatives while expanding margins.

"These results reflect the steady progress we are making and as we look ahead we see attractive opportunities to deliver consistent growth and create shareholder value. In the medium term I expect Diageo to maintain organic net sales growth in the mid-single-digit range and to grow organic operating profit ahead of net sales in the range of 5-7%."

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