Coronavirus: Drinks giant warns of profit hit as bars close

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Craig Barritt

Drinks giant Diageo has warned that its profits will be hit this year, as bars and restaurants in China are forced to close because of the coronavirus outbreak.

The Guinness-owner said that operating profits were likely to be £140m-£200m lower than expected, due to disruption in Asian markets.

It joins companies such as Apple and Danone in warning about the impact of the deadly virus.

Financial markets have also fallen sharply this week as fears of a pandemic grew.

Diageo also warned on Wednesday that it expected sales to be £225m-£325m lower than expected, depending on how long it took for the outbreak to abate.

It said that bars and restaurants in China “have largely been closed and there has been a substantial reduction in banqueting… We have seen significant disruption since the end of January which we expect to last at least into March.

“Thereafter, we expect a gradual improvement with consumption returning to normal levels towards the end of fiscal 2020.”

Events being postponed in several other Asian countries, especially South Korea, Japan and Thailand, as well as a reduction in conferences and banquets and a drop in tourism have all had an impact on people buying its products.

It added that the coronavirus outbreak had caused a “significant reduction” in people using airports, especially in Asia, hitting travel retail.

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