Diageo CEO: ‘Too early to assess terror impact’
Diageo’s CEO believes it is “too early” to tell how subdued traveller numbers resulting from the spate of terror attacks across Europe will impact its business.
Speaking to journalists following the publication of Diageo’s 2015/16 financial results last week, chief executive Ivan Menezes highlighted depleted tourism figures following a number of terror attacks across Europe in recent months.
“We are in a tragic environment right now and it is too early to say how it will impact [our business],” he said. “We are seeing global travel more subdued over the past few months.”
Figures revealed soon after the November 2015 terror attacks in Paris, when 129 people lost their lives, showed that “public nervousness” in the UK led to a decline in bar and restaurant sales.
Meanwhile, global travel retail and duty free wine and spirits sales declined 2.7% in 2015, with total industry sales down 2.3%, according to Generation Research figures.
Despite geopolitical tensions in Turkey, Menezes said Diageo’s business here was “solid” and witnessed growth of 6% in its latest fiscal year.
“Our predominant business here is Raki, but our Scotch business also grew,” said Menezes. “We are monitoring events there but our business is much more dependent on domestic consumers, so [it] is solid.
“Tourism will be affected, which could affect [us], but it’s not a big part of our business there.”