BBC News | BUSINESS | Irish drinkers desert Guinness

Drinks giant Diageo is relaunching Guinness in its native Ireland because of falling sales.

While consumption of the distinctively dark stout grew 9% worldwide in the last six months of 2000, trade in Europe proved sluggish.

And the brand's performance in Ireland, where the first Guinness brewery was set up in Dublin in 1759, has prompted Diageo to launch a campaign to remind the Irish of the merits of the drink.

"The brand continues to grow in all regions except Europe, where the decline in the beer market in Ireland continued to impact the performance of the brand," the firm said as it released its latest financial results.

The volume of Diageo beers sold in Ireland slid 3% over the half year.

But "a number of programmes have been introduced to build recruitment and maintain loyalty" among Irish drinkers.

The schemes "are demonstrating significant success in increasing consumer perceptions of Guinness", the statement added.

BSE hits burger trade

Diageo also revealed that it was determined to pursue the flotation of Burger King, despite revealing a 6% slide in profits at the hamburger chain.

Burger King restaurant in Piccadilly Circus, London
Burger King: the BSE crisis hit UK and German sales
Diageo blamed a poorly-received marketing campaign for a �6m slide in Burger King operating profits to �99m in the last six months of 2000.

But the drinks firm, which on Tuesday appointed former airline boss John Dasburg to head the hamburger business, said it was refocusing the chain, valued at about �2.5bn.

"We are determined to improve the operating performance of Burger King to ensure that the [chain's] proposed full separation realises value for shareholders," Diageo chief executive Paul Walsh said.

But he admitted that trading at the chain "remains challenging".

The firm blamed the BSE scare for a decline of 2% in sales at UK Burger King outlets, and 4% at German restaurants, during the second half of 2000.

Alcopop boom

But a strong performance by the alcopop Smirnoff Ice, of which 230 million bottles were sold, helped Diageo post profits up 9.4% during the six months.

UK sales of Smirnoff Ice rocketed by more than three times, and Diageo expects the brand to reap further profits from its launch this year in the US.

"We are excited by the opportunity which the national launch of Smirnoff Ice in the US provides," Mr Walsh said.

Sales of Johnnie Walker whisky grew 6% on the back of a marketing drive, while sales of Bailey's rose 10%, supported by strong Continental demand.

Overall, profits for the half year before exceptional items increased 9.4% to �1.19bn.

Shares in Diageo stood 7p lower at 676p in early trade in London on Thursday.


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