China, Venezuela and Russia, bad news for global business with alcohol

Diageo, the British producer of alcoholic drinks, on Thursday reflected a decline in profits, hit by falling sales of whiskey in China and economic strains in Venezuela and Russia.

Net profit slipped 18% to £ 1.31 billion ($ 1.98 billion, € 1.75 billion) in the six months to 31 December - the first half of the financial year the group - compared to equivalent period a year earlier.

In China, sales of Scotch were down by 22% ", as the effects of government measures to combat extravagance continue," said Diageo in its profit.

A pravitelstvenatat campaign against corruption in China is to reduce the consumption of top branded consumer goods, such as Johnnie Walker whiskey to Diageo.

The manufacturer of Guinness stout, Smirnoff vodka and Baileys liqueur also said in a statement on Thursday "difficult trading conditions in Russia and Eastern Europe."

Diageo added that "sales and operating profit we

re significantly influenced by negative currency, driven by the strengthening of sterling against many currencies, in particular the Venezuelan Bolivar, the Russian ruble and the euro."

Diageo, which also produces rum Captain Morgan, began its last business year, with majority control of United Spirits India.

United Spirits Limited (USL) gives Diageo's largest distribution network of the company for its flagship Johnnie Walker, whiskey, which is choice above the middle class in India, and other products.

But most importantly United Spirits gives Diageo's entry in promotion with lower market prices of whiskey.

"At half saw Diageo acquire control of USL, puts us in a position to create an iconic leader in the spirits in an attractive market," said Diageo chief executive Ivan Menezes on Thursday.