Diageo recently said that it expected organic operating profit growth to decline in the first half of its current financial year due to 'materially weaker' performance in Latin America and Caribbean (LAC).
Shares in the world's largest spirits company fell 8.5% to 2,970 pence in early trading, making it the top loser on London's blue-chip .FTSEindex.
'Macroeconomic pressures in the region are resulting in lower consumption and consumer down-trading,' the world's biggest spirits company said in a statement.
'These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment.'
Sales Decline
Sales in the LAC market, which generates nearly 11% of total sales, are now expected to decline by more than 20% in the six months ended December, the company added.
Meanwhile in Europe, growth continues to be strong despite geopolitical tensions in the Middle East, albeit the pace is slower than the second half of the previous financial year, Diageo said.
For the year ended 30 June, the maker of Tanqueray gin and Don Julio tequila narrowly beat earnings estimates as sales of its more expensive liquor brands offset lower volumes.
Read More: Diageo Serves Up Profit Rise With More Premium Spirits In The Mix
News by Reuters edited by Donna Ahern, Checkout. For more drinks stories click here. Click subscribe to sign up for the Checkout print edition.
