EnDrinks maker Diageo reported fiscal H2’20 (to June 30) revenues which fell by 23.6% year over year and were 6.4% below analysts’ expectations according to S&P Global Market Intelligence data. The fastest rate of decline in organic revenues was seen in Latin America with a 40.0% drop while North America dropped by a more moderate 1%. The latter reflects the replacement of “on-trade” (bars) with “off trade” (retail) sales.
Much of the strength in the latter however was the result of stronger sales of locally produced whisky in the U.S. market with shipments of Scotch, vodka and beer being much weaker. Panjiva’s data shows total U.S. seaborne imports linked to Diageo fell by 27.9% year over year in Q2’20, led by a 45.1% drop in shipments of beer, mostly Guinness where the closure of bars will have hurt demand.
Shipments of whiskey meanwhile fell by 36.3%, potentially hurt by U.S. tariffs on imports from Europe linked to the ongoing aerospace and steel spats. Other imports fell by a more moderate 1.5% which may reflect the growing popularity of other spirits.
Source: Panjiva
The main area of growth among the other spirits lines has been tequila, with exports linked to Diageo from Mexico having increased by 5.8% year over year in Q2’20, despite the restriction linked to COVID-19, after a 44.5% surge in Q1. A rapid recovery in exports, with a 16.8% surge in June, allowed Diageo to outperform its peers.
Total Mexican exports of tequila fell by 12.8% year over year in Q2. While exports linked to Becle (Casa Cuervo) improved by 2.7% those linked to most other producers dropped including Beam Suntory and Bacardi which fell by 23.8% and 36.8% respectively.
Source: Panjiva
