NEWS
DIAGEO’S H1 2026 SALES DOWN 2.8%, DRAGGED BY CHINA & USA
By Staff Reporter
2-3-2026
Source: Diageo
Global drinks giant Diageo has reported a 2.8 percent fall in organic net sales for the first half of fiscal 2026 (six months ended 31 December 2025), dragged mainly by a catastrophic slump in its Chinese baijiu division and weak performance across Greater China, alongside soft demand in North America.
The company’s organic operating profit is also down 2.8 percent. The performance was overwhelmingly weighed down by its Chinese baijiu business: Greater China organic sales collapsed 42.3 percent, while Chinese baijiu volumes plummeted 50.4 percent in the six-month period, due to an alcohol ban during official events from the central government.
Excluding the underperforming Chinese baijiu segment, group organic sales would have been nearly flat, down just 0.5 percent, highlighting the severe underperformance of Diageo’s local spirits portfolio in the Chinese market.
North America also recorded a 6.8 percent organic sales decline, due to President Trump’s tariff policy.
Though Europe, Latin America and Africa delivered modest growth, that failed to offset China and US losses.
Diageo cut its full-year FY2026 guidance, now projecting organic net sales to drop 2 to 3 percent and organic operating profit to range from flat to low single-digit growth.
The company reduced its interim dividend and announced tighter cost controls, balance sheet discipline and portfolio optimisation measures under new CEO Dave Lewis, as it grapples with prolonged weakness in China and US markets.
The company said core global brands including Johnnie Walker and Tanqueray remained resilient in most international markets, but could not offset the downturns in Diageo’s two major markets of China and US.
(the writer can be contacted at: info@thewinechronicle.com)
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