The popular drinks firm, Diageo, which owns brands like Johnnie Walker and Guinness said that it would face a challenging market, after witnessing very little growth in profits. Diageo’s profits fell down to £2.093bn in the last 12 months ending July 30 from £2.095bn during the same period last year.

The loss of the South Korean license for the firm hit Asia Pacific, which was a source of strong sales for the company. However, the loss was offset to some extent due to increased demand for its beer products in Africa and whisky products in Latin America. The net sales of the world’s largest drinks producer rose by 7%.

Diageo’s chief executive, Paul Walsh, said that they were entering the new financial year in the face of global slowdown in GDP growth and even more challenging trends relating to the international economy. While the company pre-tax profits fell, the operating profits increased from £2.159bn to £2.226bn. The company’s outlook for 2009 is inevitably less bullish and the current increase in commodity prices could also eat into the company’s operating profits.

However, the company is well poised to counter the slowing growth in economy. The firm’s strength was in its diversity of products like wine, beers and spirits, added Mr Walsh.

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