Deirdre O Meara 
According to the spirits and beers giant Diageo, their total net sales in Ireland increased by 20%, largely due to price increases for Guinness. The company also reported that global sales of Baileys were flat on weaker demand in North America.
In a statement, Diageo CEO Ivan Menezes said “We have delivered targeted price increases across all regions, enabled by our expertise in revenue growth management and supported by strong consumer demand for our brands.” Let’s take a closer look at how these price increases impacted Diageo’s overall sales in Ireland.
To begin with, it is important to note that Diageo is one of the world’s largest drinks companies. They are responsible for producing some of the most popular alcoholic beverages on the market such as Guinness, Baileys, Smirnoff vodka, Johnnie Walker whisky and Captain Morgan rum. In addition to their wide array of popular products, they also produce several lesser-known beverages such as Harp lager beer and Cîroc vodka.
The company noted that their total net sales in Ireland grew by 20%, helped largely by their decision to increase prices for Guinness. This suggests that consumers are willing to pay more for the beverage despite a weak Irish economy. Furthermore, these price hikes appear to be having a positive effect on other areas of their business as well; global sales of Baileys increased 18.4% to £9.4bn (€10.7bn).
This is an impressive feat considering the fact that demand for Baileys is decreasing in North America. It appears that targeting customers with price increases has allowed them to offset any losses from lower demand elsewhere around the world.
Conclusion
All things considered, it seems like Diageo’s decision to increase prices for Guinness has paid off handsomely; their total net sales in Ireland have grown significantly while global sales of Baileys remain steady despite weaker demand elsewhere around the world. It remains to be seen if this trend will continue over time but it certainly appears as though targeting customers with price increases has been beneficial thus far for Diageo’s business operations in Ireland and worldwide.
