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Diageo Says Red Sea Disruption Delaying Some Spirits Shipments

By Reuters
Diageo Says Red Sea Disruption Delaying Some Spirits Shipments

Diageo is seeing delays in shipping due to attacked on vessels in the Red Sea, the spirits retailer revealed today.

The chief financial officer of the company Lavanya Chandrashekar said they were currently putting in place contingency plans.

The news comes after the drinks giant released first-half results that failed to cheer investors and caused a more than 4% drop in shares.

‘Safety Stocks’

Diageo is one of the world’s top spirits makers, and it ships products such as Johnnie Walker whiskey – which can only be made in Scotland – and tequila, made in Mexico, all over the world.

Chandrashekar told Reuters that shipments of products like scotch to Asia were facing delays as vessels re-routed to avoid the Red Sea.


She did not say whether this would have an impact on the company’s outlook for the year, but said Diageo had additional inventory in different regions to act as a buffer in emergencies.

"We always have safety stocks,” she said. “We live in a volatile world and even if it's not geopolitical incidents, things can go wrong,"

She added that Diageo had invested to ensure it could react in such a scenario.

Middle East

Diageo has previously said that trading in some markets in the Middle East had effectively ceased following Hamas' October attack on Israel and the subsequent conflict.

Chandrashekar and chief executive Debra Crew said on Tuesday that distributors in some markets in the region had essentially stopped making orders following the attack.


Crew added that the situation remains "far from normal".

Attacks by Iranian-backed Houthi rebels in the crucial Red Sea shipping lane have in recent months severely disrupted shipping in the Suez Canal, the shortest sea route between Asia and Europe.

Read More: Freight Through Suez Canal Down 45% Since Houthi Attacks

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