Guinness, Johnnie Walker owner sees rising profits

Christopher Werth Feb 10, 2012

David Brancaccio: You may have have never sat at the bar, staring at the Diageo on offer. The alcoholic drinks giant owns brands that are more famous — including Guinness and Johnnie Walker. Diageo says that its profits rose 15 percent last year — this despite flat sales in beleaguered Europe.

From London, Christopher Werth explains how they did it.

Christopher Werth: Today, nearly one-third of the demand for alcoholic drinks comes from big emerging markets like China.

And Olly Wehring of says there’s one kind of drink everyone loves.

Olly Wehring: When you look at China, when it comes to spirits — they love it international, and they love it brown.

In China, sales of bourbon and Scotch and Irish whiskeys are doing very well. Big drinks companies like Diageo and its rival, Pernod Ricard — owner of Jameson — are competing to capture as many whiskey drinkers as possible.

I asked Trevor Stirling, an analyst at Sanford Bernstein, if this is the start of a “whiskey war”.

Trevor Stirling: Well I don’t think war is quite the right phrase. But ten, fifteen years ago, let’s say scotch was viewed as an old man’s drink, and clearly there’s been a huge turnaround.

And that includes the U.S. Diageo says its sales in North America are up 5 percent, athough American tastes are changing. Stirling says last year marked the first time Irish whiskey outsold Scotch.

In London, I’m Christopher Werth, for Marketplace.

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