Diageo scraps sales target as US tariffs loom

By Henry Saker-Clark, PA Deputy Business Editor

Johnnie Walker and Guinness maker Diageo has scrapped a key sales target amid growing uncertainty over US tariffs and volatile consumer demand.

The spirit giant has said it is talking with the US Government over upcoming tariff policies that could “impact” its sales recovery.

It said the confirmation over the weekend that tariffs will be imposed, although delayed for at least a month, “adds further complexity” to its ability to predict future trading.

Diageo said its tequila and Canadian whisky brands are expected to be particularly affected.

It came as the London-based company revealed that net sales dipped by 0.6 per cent to 10.9 billion dollars for the six months to December 31st, as an increase in organic sales was dragged back by “unfavourable” currency exchange rates.

Reported operating profit declined 4.9 per cent for the period.

In Great Britain, the group’s sales grew two per cent as it was buoyed by soaring demand for Guinness, despite “temporary supply constraints” in recent months.

British pubs reported shortages of Guinness over the Christmas period as they were unable to secure enough of the beer to meet high demand.

Guinness sales growth offset weaker spirit sales in Britain, which were down by around 6% for the half-year.

Debra Crew, chief executive of Diageo, said: “Our fiscal 2025 first-half results marked a return to growth, delivering organic net sales growth of 1% despite a challenging industry backdrop as consumers continue to navigate through inflationary pressures.

“The confirmation at the weekend of the implementation of tariffs in the US, whilst anticipated, could very well impact this building momentum.

“We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause, and we will also continue to engage with the US administration on the broader impact that this will have on everyone supporting the US hospitality industry, including consumers, employees, distributors, restaurants, bars and other retail outlets.”