Diageo fears a puncture from India roads ban

Diageo, the drinks giant behind the Guinness and Smirnoff vodka brands, today admitted first-half sales could be hurt by a recent ban on selling alcohol near Indian highways.

The FTSE 100 drinks maker said it expects the growth rate to be impacted by a move this year which aimed to curb drunken driving.

A supreme court order in India banned the sale of booze from within 500 metres of a highway.

Rivals such as Pernod Ricard have previously warned they would be hit too.

Diageo also said revenues would be hit by the later timing of the Chinese New Year.

However, chief executive Ivan Menezes said: “Our expectations on overall performance for the year remain unchanged.”

The shares fell 59p, or 2.36%, to 2441p.

Also in the drinks sector, pubs firm Shepherd Neame said sales at sites open for more than a year jumped 8.1% in the year to June 24. Total turnover rose 11.7% to £156.2 million.

The Bishops Finger brewer saw pre-tax profits fall to £11.8 million from £14.4 million, after property disposals in the previous year.