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Last Updated: Thursday, 30 August 2007, 10:58 GMT 11:58 UK
Overseas sales give Diageo a lift
Smirnoff and Johnnie Walker bottles
Diageo's sales were led by its spirits
Drinks giant Diageo has reported a small rise in annual sales, as rising international demand offset a decline in the European market.

For the 12 months to 30 June, the maker of Guinness, Smirnoff and Johnnie Walker saw sales rise 2% to 9.9bn ($19.9bn) from 9.7bn a year earlier.

While Diageo's sales in Europe fell 2%, they rose 12% in Asia-Pacific and by 16% across Africa and South America.

Sales in China soared 41% while in India they jumped 30%.

In both countries Diageo is continuing to benefit from their economic booms, with demand for Johnnie Walker whisky particularly strong.

Diageo's sales in the US and Canada were up 3%.

'Stronger platform'

The weakness in Europe centred on the UK and Republic of Ireland, and in particular sales of Guinness, which declined 5% in the UK and by 9% in Ireland.

Guinness sales were down in Europe but up in Africa

Despite the weak Guinness performance in Europe, sales of the stout internationally enjoyed double-digit growth, led by Africa.

The African demand for Guinness is led by Nigeria, which now consumes more Guinness than the drink's home market of the Republic of Ireland.

The UK remains the world's largest consumer of Guinness with the Republic of Ireland now in third place.

Diageo's annual pre-tax profit was down 2.4% to 2bn, although last year's figure of 2.1bn was inflated by a one-off gain from the 151m sale of shares in US food group General Mills.

"Whilst we watch for any impact the current volatility in financial markets may have on broader trading conditions, the investments we have made in brands and markets this year have created an even stronger platform for the future," said Diageo chief executive Paul Walsh.

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