Nestlé and Diageo sales hit by Chinese slowdown
|
Version 0 of 1. Weak demand in China continues to take a heavy toll on consumer goods giants Nestlé and Diageo as they reported disappointing sales today. Swiss-based Kit Kat maker Nestlé, the world’s largest food and drinks maker, announced underlying organic growth had slowed to 4.5 per cent in its third quarter compared with 4.7 per cent in the first half. Sales in the nine months to the end of September came in below analyst expectations at Swfr66.2 billion (£43.7 billion). Spirits giant Diageo said a slowdown across emerging markets led to a 3.5 per cent tumble in first-quarter volumes. Nestlé reported sales growth in emerging markets, which represented 44 per cent of group sales, slowed to 9.5 per cent from 9.7 per cent in the first half and said China was particularly challenging. However, it is still aiming for organic growth of around 5 per cent for the year. Smirnoff vodka-to-Johnnie Walker whisky maker Diageo suffered from a plethora of problems including a slowdown in China. There was also a tax hike in Kenya, political instability in Russia and lacklustre performance in north America, which makes up 34 per cent of its global sales, with sales up just 0.1 per cent. Asia Pacific saw revenues tumble 7.4 per cent as a crackdown on ostentatious spending hit sales in China, although Diageo is pushing ahead with launches there, including its Haig Club new scotch whisky, created in partnership with David Beckham |