US sales lift Allied Domecq's spirits

Strong demand from US consumers has helped Allied Domecq increase profits across the first half of the year, helping to offset tough markets elsewhere in the world.

In the year to the end of August, the world's second-biggest spirits producer reported a 6 per cent increase in pretax profits, up to £521m, with turnover in the spirits and wine business up by 5 per cent to £2,385m. Both Allied and rival Diageo have been targeting the US market for spirits growth, as consumers are increasingly tempted away from beer.

There was strong US growth of products including Malibu rum, Stolichnaya vodka and Beefeater gin. Despite a 2 per cent dip in Courvoisier cognac sales in the US, the brand performed well in the UK, and overall, the group's core spirits brands saw volumes increase by 8 per cent. "Our core brands performed well in the United States, delivering overall market share gains," said chief executive Philip Bowman. "Overall these good performances have more than offset the trading challenges we faced in markets such as South Korea, France and Germany."

The group's UK business continued to deliver profit growth, with Courvoisier growing both volume and turnover, helped by promotions include an on-trade focus on cocktails.

Malibu continued to grow share in both the on- and off-trade, up by 8 per cent, boosted by the success of the 'Seriously Easy Going' ad campaign and a marketing focus on mixing with cranberry.

However, volumes for the Tia Maria range declined in comparison with high volumes generated by the launch of cream liqueur Tia Lusso launch last year.

Mr Bowman said: "Looking ahead, we anticipate that the continued momentum of the core brands, supported by our focused marketing investment, will drive volume and turnover growth, as well as higher gross margins, even though certain markets remain challenging.

"The premium wine brands are on track to meet the five year return on investment targets that we set out two years ago."