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Last Updated: Thursday, 2 September, 2004, 12:00 GMT 13:00 UK
Smoking ban 'hits Guinness sales'
Smoking has been banned in pubs in Ireland since March

A major drinks company has blamed the smoking ban in the Republic of Ireland for a fall in the sales of Guinness.

Shares in Diageo, the world's biggest drinks company, have fallen by four percent and, in the Republic of Ireland, one of the reasons could be the ban.

Since the end of March, smoking has been illegal in workplaces, including pubs and restaurants.

The drinks company said on Thursday that the smoking ban in pubs, restaurants and bars throughout the Republic of Ireland could be behind the fall in sales of Guinness.

The total volume of "the black stuff" sold in Ireland dipped by 6%, the company said.

In the UK, consumers are increasingly preferring a drink at home to one in a bar or pub, and this had affected sales of Smirnoff Ice, the company said.

Diageo's profits were around 2bn for the past year, although that was only 1% more than a year ago.

Diageo chief executive Paul Walsh said that behind that figure, the company's performance was not bad.

Diageo brands
Captain Morgan
Johnnie Walker
Jose Cuervo

Overall, Diageo reported a dip in full-year sales revenue after a slide in the US dollar eroded the value of exports.

The maker of Smirnoff vodka said Europe was a "challenge", while North America provided the "biggest opportunity". It reiterated profit targets set in July.

Diageo said that currency volatility knocked $105m (59m) off earnings in the year ending 30 June.

Turnover for the period was 8.89bn, down from 9.28bn a year earlier.

Pre-tax profits before one-off items fell to 2.07bn - in line with analysts' forecasts - from 2.12bn last year.

However, operating profit ticked higher to 1.87bn from 1.79bn, which included 50m of restructuring costs to cover changes such as the closure of the Guinness brewery at Park Royal in London.

Total sales volumes worldwide rose 4% during the year.

The Irish Republic's experiment with strict anti-smoking legislation has been closely followed abroad, with Norway introducing similar legislation in June.

There has also been growing pressure for Northern Ireland to follow suit.

Dollar slide hits Diageo revenue
02 Sep 04  |  Business
Diageo attacked over whisky cuts
23 Jul 04  |  Scotland

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