Diageo, the owner of global brands such as Guinness, Johnnie Walker whisky, Gordon’s gin and Smirnoff vodka, has reported a nearly 28% fall in operating profit in the 12 months to the end of June, compared with a year earlier.

The slump in annual profits is coming on the back of the resignation of Debra Crew, the chief executive officer, as the world’s biggest spirits company searches for a new boss. Nik Jhangiani is the interim CEO.

Interim CEO Responds to Tough Financial Year
Jhangiani said Diageo had experienced a “challenging year” but noted certain brands including Guinness, Don Julio tequila and the blackberry-infused Canadian whisky Crown Royal Blackberry were standout performers. “There is clearly much more to do across our broader portfolio and brands,” he said.

Tariffs Add More Pressure on Business

Diageo also said that it expected an annual hit of $200m from President Donald Trump’s tariffs with 10% levy on UK drinks imports into the United States.

The tariffs on British goods came into effect on 30 June, when the UK-US trade deal kicked in.

Company Responds with Contingency Plans

According the UK Guardian report, the British drinks company said it had “continued to undertake considerable contingency planning” in recent months, and remained “focused on what we can control in relation to tariffs”.

Diageo noted that it had been working to mitigate the impact of tariffs, carrying out work including “inventory management, supply chain optimisation and reallocation of investments”.

Stock Market Performance Reflects Broader Challenges

According to analysis by the broker AJ Bell., Diageo’s shares have fallen by more than a quarter so far this year, making them the third-worst performer on the FTSE 100 in share price terms.

What’s more, changes in drinking habits, especially among younger consumers, coupled with high cost of living have also affected the company’s shares.