Diageo reports 15.4% decline in US spirits sales during third quarter
Tequila sales in the US dropped by double digits amid softer demand and increased competition
USA – Diageo recorded a 15.4% fall in spirits sales in the United States during the third quarter of fiscal 2026, as weaker demand and rising competitive pressure continued to weigh on its largest market.
For the three months ended 31 March 2026, the beverage company posted net sales of US$4.48 billion, representing organic growth of 0.3% year over year, while reported sales increased by 2.3%.
At the same time, total sales volumes rose by 0.4% during the quarter, although the company described trading conditions in North America as difficult.
Chief executive officer Dave Lewis said the company’s portfolio in the region needed to become more competitive as it works to improve performance in the market, which contributes 38% of group net sales.
Consequently, Diageo’s North America business generated organic net sales of US$1.71 billion in the quarter, reflecting a 9.4% decline from the same period in 2025.
Meanwhile, the company’s tequila category in the US recorded a double-digit decline, which Diageo linked to weaker category demand, stronger competition and difficult comparisons with the previous year.
However, Diageo stated that distributor shipments in the US received some support from stock purchases made ahead of the upcoming FIFA World Cup scheduled for June.
Performance varies across global markets
Elsewhere, the company’s Asia-Pacific business posted a 0.8% decline in organic net sales, as weaker consumer demand in Greater China and continued softness in Chinese white spirits weighed on regional performance.
In addition, Diageo said sales of baijiu in China continued to decline by double digits, while its international premium spirits portfolio recorded low single-digit growth supported by the timing of the Chinese New Year holiday.
India delivered high single-digit growth, excluding Maharashtra state, where higher excise taxes affected sales during the quarter.
By comparison, Latin America and the Caribbean reported organic sales growth of 16.2%, helped by football tournament-related distributor purchases and Easter-related demand during the reporting period.
Brazil recorded double-digit sales growth during the quarter, while Mexico experienced a high single-digit decline.
In Africa, organic sales rose by 17.1%, supported by double-digit growth in Tanzania, Uganda and South Africa, while the company said spirits sales in the region were driven by Kenya Cane and ready-to-drink products such as Smirnoff Ice.
Meanwhile, Europe recorded organic sales growth of 8.8%, supported by Guinness sales in Great Britain and Ireland as well as stronger spirits demand across the Middle East, North Africa, Central and Eastern Europe, and Türkiye.
Diageo maintained its fiscal 2026 guidance for an organic sales decline of between 2% and 3%, while also confirming that its Accelerator cost-saving programme remains on course to deliver US$300 million in savings by the end of the financial year.
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