Diageo, the world's largest producer and distributor of alcoholic drinks, said Thursday its profit for the last six months of 2008 rose 16.6 per cent, but warned the impact of the global recession has intensified, clouding its earnings outlook.

Red Stripe, asked how the announcement would impact Jamaica, in terms of jobs and capital investment, said it would not comment until it had discussions with its staff, spokeswoman Maxine Whittingham told the Financial Gleaner.

Diageo reported a profit of £1.14 billion (US$1.63 billion), up from £975 billion a year earlier, for the last half of the year, which is the first half of the company's fiscal year.

Sales up

Sales were up 18 per cent to £6.7 billion.

Diageo said the effects of the global economic downturn became more pronounced in November and December.

"Current economic trends indicate that consumer confidence will reduce further and the outlook for the second half is more difficult to predict," said Chief Executive Paul Walsh. The second half refers to the first half of 2009 on the company's calendar.

The company said it was embarking on a restructuring plan, which would result in an exceptional charge of £200 million.

In North America, overall sales volumes increased two per cent, and the company said it held onto its 30.4 per cent share of a slowing market even though cutting its marketing spend by six per cent.

Net sales fell

Europe was a tougher story, especially in Spain, where net sales fell 18 per cent. Sales of spirits and wine were down two per cent in Europe, beer declined four per cent, and ready-to-drink lines declined 12 per cent, the company said.

Sales in Africa remained strong, the company said, with a 25 per cent increase for Guinness stout leading a 20 percent overall gain in sales.

Diageo also report double-digit sales growth in Venezuela, Brazil and Mexico.

- Gleaner and AP reports