Spirits firm Distil has reported a steep drop in revenue in light of inflation, cost-of-living pressures and a significant hike in alcohol duty.
The AIM-listed firm, which owns brands including RedLeg Spiced Rum, Blackwoods Gin and Vodka and Blavod Vodka, said that revenue fell by 55 per cent in the four months covering April-June this year.
It lowered its guidance for the full year and will seek immediate short-term funding. Distil is currently “exploring options”, it said.
Executive chairman, Don Goulding, said: “The business had anticipated lower sales in the first four months of the year due to phasing trends, however the results achieved sit below expectations.
“The global alcohol market has been facing persistent challenges in recent years, with global drinks industry data service, IWSR, recording a decline in global beverage alcohol volumes in 2023 for the first time in 30 years, with difficulties continuing into 2024.”
The decline has been driven by an “extraordinarily challenging” economic environment, Goulding said, as consumers have been faced with ongoing inflationary pressures which have put a strain on spending.
“While this is an issue affecting all global markets, for 2024, this has been exacerbated in the UK by the poor weather, leading to further curbs on socialising both in and out of home,” Goulding added.
Distil is not the only firm suffering: leading drinks company Diageo reported a major decline in annual profit and its first fall in sales since the pandemic.
Profit at the FTSE 100 firm, which as well as spirits sells Guinness and Baileys, fell by $304m (£237m) – or 4.8 per cent.