January 30, 2020 / 7:40 AM / a month ago

Diageo sees organic net sales growth at lower end of outlook on trade uncertainty

FILE PHOTO: A bartender takes a bottle of Johnnie Walker whisky at Barmaglot bar in Almaty, Kazakhstan June 22, 2017. REUTERS/Shamil Zhumatov/File Photo

(Reuters) - Diageo Plc (DGE.L), the world’s largest spirits company, on Thursday said it expects annual organic net sales growth to be at the lower end of its previous forecast as it faces the fall-out from increasing global trade uncertainty.

The company now expects full-year organic net sales growth to be at the lower end of the 4% to 6% range it previously forecasted. The company highlighted volatility in India, Latin America and the Caribbean.

The maker of Johnnie Walker Scotch whisky, Smirnoff vodka and Guinness stout said operating profit rose 0.5% to 2.44 billion pounds ($3.21 billion) for the six months ended Dec. 31.

“There is ongoing uncertainty in the global trade environment and we would not be immune from further policy changes,” Chief Executive Officer Ivan Menezes said.

Diageo has faced pressure from U.S. President Donald Trump’s use of tariffs as a weapon in trade conflicts after the United States slapped a 25% tariff on scotch whisky and other European products.

First-half organic operating profit grew 4.6%.

Reporting by Tanishaa Nadkar and Siddharth Cavale in Bengaluru; Editing by Shounak Dasgupta, Bernard Orr

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