Latin spirit evades downbeat Diageo

DRINKS giant Diageo has admitted that trading in its second-line markets had been hit by economic and political turbulence in Latin America. Although trading in its four biggest markets was in line with expectations, volume growth in the next tier down had been affected.

The shares sank 33p to 775p as Diageo revealed that sales of Johnnie Walker Red Label whisky and local best-sellers had been hit as the group was forced to increase prices to compensate for currency devaluations.

Sales growth of the group's nine 'global priority brands' has also 'slowed slightly' due to price increases for J&B in Spain and weakening demand for Baileys, but the Seagram brands have met 'all expectations'.

Diageo, which is believed to have narrowed down the list of bidders for Burger King to three venture capitalists and a New York restaurants group, said the sales process was 'progressing as planned...During the second half Burger King continued to show good signs of improved performance,'said Diageo, which was updating the City following its year-end in June. Full results will be unveiled in September.