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Spirits help Diageo to 8% growth

Published:  23 July, 2008

Strong demand for Johnnie Walker whisky and Captain Morgan rum in the US and South America has helped UK drinks giant Diageo record an 8% profit growth this fiscal year.

ACNielsen data for the four weeks to June 2 showed Diageo outperformed the market in the US - the company's most profitable region - rising 1.6% compared with 0.6% growth in the market overall, led by premium spirits brands.

But shares fell 2.8% when it said in a statement that US growth in the spirit market had "slowed in recent months. It predicted the weak US dollar would cost it 80m.

European trade had been tougher due to a fall in alcopops, but trading had improved both there and in Asia in 2007 following higher market expenditure. Profits in Russia, too, had increased as affluent young consumers turned to premium spirits.

CEO Paul Walsh credited Diageo's healthy sales growth to the strength of its brands.

The company will report its full-year profits at the end of August.