Diageo forecasts flat annual sales growth, raises cost-savings target
The company said organic sales growth will likely only match the 1.7 per cent uplift of last year, when the drinks maker grappled with US President Donald Trump's tariff war, volatile demand and management upheaval. That growth was slightly more than analysts expected.
The world's biggest spirits maker is looking for a new chief and finance head to turn around its financial and share performance, and guide it through a plan announced in May to cut $500 million in costs and make substantial asset sales by 2028.
'Macroeconomic uncertainty and the resulting pressure on consumers continues to weigh on the spirits sector,' Diageo said in its first set of results under interim chief executive Nik Jhangiani.
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Diageo said it expects organic sales to fall slightly in the first half of 2026, with growth more weighted towards the second half.
The board of Diageo is moving quickly to find a permanent chief executive officer and will likely make a decision by the end of October, Mr Jhangiani said on a media call.
Former chief executive, Debra Crew, stepped down last month after two years in the role. - Reuters, Bloomberg
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Irish Times
4 hours ago
- Irish Times
Trump's higher tariff rates kick in, hitting goods from major trading partners
President Donald Trump's higher tariff rates of 10 per cent to 50 per cent on dozens of trading partners kicked in on Thursday, testing his strategy for shrinking US trade deficits without large disruptions to global supply chains, higher inflation and stiff retaliation from trading partners. US Customs and Border Protection agency began collecting the higher tariffs at 12.01am EDT (0401 GMT) after weeks of suspense over Mr Trump's final tariff rates and frantic negotiations with major trading partners that sought to lower them. Goods loaded on to US-bound vessels and in transit before the midnight deadline can enter at lower prior tariff rates before October 5th, according to a CBP notice to shippers issued this week. Imports from many countries had previously been subject to a baseline 10 per cent import duty after Mr Trump paused higher rates announced in early April. But since then, Trump has frequently modified his tariff plan, slapping some countries with much higher rates, including 50 per cent for goods from Brazil, 39 per cent from Switzerland, 35 per cent from Canada and 25 per cent from India. He announced a separate 25 per cent tariff on Indian goods on Wednesday to be imposed in 21 days over the South Asian country's purchases of Russian oil. Ahead of the deadline, Mr Trump heralded the 'billions of dollars' that will flow into the US, largely from countries that he said had taken advantage of the United States. 'THE ONLY THING THAT CAN STOP AMERICA'S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!' Mr Trump said on Truth Social. Eight major trading partners accounting for about 40 per cent of US trade flows have reached framework deals for trade and investment concessions with Mr Trump, including the European Union, Japan and South Korea, reducing their base tariff rates to 15 per cent. Britain won a 10 per cent rate, while Vietnam, Indonesia, Pakistan and the Philippines secured rate reductions to 19 per cent or 20 per cent. 'For those countries, it's less bad news,' said William Reinsch, a senior fellow and trade expert at the Center for Strategic and International Studies in Washington. 'There'll be some supply chain rearrangement. There'll be a new equilibrium. Prices here will go up, but it'll take a while for that to show up in a major way,' Mr Reinsch said. Countries with punishingly high duties, such as India and Canada, 'will continue to scramble around trying to fix this,' he added. Mr Trump's order has specified that any goods determined to have been trans-shipped from a third country to evade higher US tariffs will be subject to an additional 40 per cent import duty, but his administration has released few details on how these goods would be identified or the provision enforced. Mr Trump's July 31st tariff order imposed duties above 10 per cent on 67 trading partners, while the rate was kept at 10 per cent for those not listed. These import taxes are one part of a multilayered tariff strategy that includes national security-based sectoral tariffs on semiconductors, pharmaceuticals, autos, steel, aluminium, copper, lumber and other goods. Trump said on Wednesday the microchip duties could reach 100 per cent. China is on a separate tariff track and will face a potential tariff increase on August 12th unless Trump approves an extension of a prior truce after talks last week in Sweden. He has said he may impose additional tariffs over China's purchases of Russian oil as he seeks to pressure Moscow into ending its war in Ukraine. Financial markets largely shrugged off the new tariffs, with stock markets in Asia at or near record highs while the dollar dipped slightly. Mr Trump has touted the vast increase in federal revenues from his import tax collections, which are ultimately paid by companies importing the goods and consumers of end products. US Treasury Secretary Scott Bessent has said that US tariff revenues could top $300 billion a year. The move will drive average US tariff rates to around 20 per cent, the highest in a century and up from 2.5 per cent when Trump took office in January, the Atlantic Institute estimates. Commerce Department data released last week showed more evidence that tariffs began driving up US prices in June, including for home furnishings and durable household equipment, recreational goods and motor vehicles. Costs from Mr Trump's tariff war are mounting for a wide swath of companies, including bellwethers Caterpillar, Marriott, Molson Coors and Yum Brands. All told, global companies that have reported earnings so far this quarter are looking at a hit of around $15 billion to profits in 2025, Reuters' global tariff tracker shows. – Reuters
Irish Times
5 hours ago
- Irish Times
The future of pocket money? NestiFi lets families invest together for kids
Traditional banking has – eventually – adopted innovations such as digital-only accounts and smartphone payments. However, some elements of the financial infrastructure are still firmly stuck in the past, as anyone who has tried to gift money to a child in forms other than cash or vouchers will have discovered. Having run across this problem himself, Niall Dennehy began mulling over a possible solution. He applied his background in banking, telecoms and digital payments, and in June this year launched NestiFi, an AI -powered investment platform allowing parents, grandparents, relatives and friends to invest in a child's future as a group. To start the process, a designated adult downloads the free app and sets up an account for the child. This provides access to a personalised link they can share with family and friends who want to contribute to the child's nest egg. The person overseeing the account then chooses from a range of low-fee index funds and invests the money. Performance expectations are based on a 7.2 per cent average annual return, which Dennehy says is the approximate historical average (adjusted for inflation) of the S&P 500 over the past 30 years. NestiFi does not need a banking licence as it does not hold any client money. Investments are made through licensed/regulated intermediaries such as brokers, credit unions and brokerage-as-a-service providers. 'NestiFi rethinks investing through the lens of family and collaboration,' he says, adding that it is designed to support families in several different ways, whether that's to save for college fees, give gifts of digital assets or introduce children to the concept of financial literacy. [ Ireland 'actively hindering its citizens from building wealth and securing their future' Opens in new window ] 'The platform supports traditional investments such as stocks and ETFs as well as blockchain-powered assets like stablecoins and tokenised real-world assets,' Dennehy says. 'Our AI adviser 'Sebastian' provides personalised financial guidance for each user, and children can earn rewards by completing interactive lessons. For example, if they spend X number of hours learning on the app, they'll get a voucher for the same amount of time for Disney Plus.' NestiFi is not Dennehy's first innovation rodeo. A graduate of the University of Galway, where he studied IT, Dennehy has been involved with multiple start-ups as founder/co-founder, including digital payments infrastructure company, Aid:Tech, which was the overall winner of The Irish Times Innovation Awards in 2018. NestiFi is his latest venture, and the company currently employs four people. 'I've spent the last decade building technology at the intersection of trust, transparency and financial inclusion, and it struck me that families have no modern tools with which to build wealth together because most investment apps are built for individuals, not families,' Dennehy says. 'I felt the time had come to replace siloed banking apps and old-school custodial accounts with a next-gen platform that would bring together traditional investing, blockchain assets and family-based financial literacy in one seamless experience,' he adds. Dennehy says the company's initial target market will be the US, where an $84 trillion (€75.5 trillion) intergenerational wealth transfer is already under way. Europe will follow, including Ireland, where Dennehy says a substantial wealth transfer will also take place over the next 20 years. Families are a key market for NestiFi, but so are credit unions, financial advisers, financial institutions and fintechs interested in offering NestiFi as a value-added service to their clients. Investment in the business to date is running at about €250,000, and the company is currently raising a seed round of €1.5 million. A private beta launch is slated for the third quarter, with a full roll-out in the US to follow later this year. NestiFi's revenue will come from transaction fees and signing up channel partners. NestiFi is taking part in the AI Ecosystem Accelerator Programme run jointly by NovaUCD and CeADAR – Ireland's centre for AI – while completing regulatory compliance in the US and guiding a pilot group of families through a test run of the app. 'The Tam (total addressable market) is huge, and while we face competition, I think we can differentiate ourselves through the ease of our user interface and the fact that this side of the market is underserved by technology,' Dennehy says. The biggest challenge Dennehy has faced in setting up NestiFi has been navigating regulatory complexity while trying to move fast. 'We're building something that touches custody, tokenised assets and AI, all in a space where compliance really matters, especially when kids and families are involved. Trying to innovate responsibly without getting stuck in red tape has been the real balancing act,' he says. As a serial entrepreneur, Dennehy knows his way around the start-up ecosystem. However, he says that clearer guidance and faster turnaround times within the grants system would make a massive difference to how fast a company can develop. 'Often, the paperwork is intense, and the decision timelines are too slow. If there were more founder-first grant supports with less admin and more mentorship built in, I think we'd see even more global-scale companies emerge from Ireland,' he says. 'Too often, start-ups are forced to chase funding instead of focusing on customers and product. There is a lot of goodwill and some excellent people in the ecosystem, but I think there's still a gap between ambition and execution. [ Google, CeADAR to partner on deal to support AI in Irish business Opens in new window ] 'What I'd truly love to see would be a founder-led innovation hub, something agile with fast access to capital, technical expertise, and hands-on support for international expansion. We need to move away from treating grants as red-tape-heavy lifelines and instead use them as strategic fuel to help early-stage teams build, test and scale faster,' Dennehy says. Are you aware of a recent innovation or innovator we should feature in this column? Email us at innovation@
Irish Times
6 hours ago
- Irish Times
HVO is a climate ‘quick fix' that could be worse than fossil fuels
'For every complex problem, there is an answer that is clear, simple and wrong.' This aphorism frequently comes to mind when I reflect on climate solutions. Problems don't come more complex or urgent than climate change, and sadly there is no shortage of solutions that seem appealing and straightforward, but are, at best, distractions. In the worst cases, some of these solutions can be more harmful than doing nothing at all. Hydrotreated vegetable oil (HVO) is one such solution. HVO is being aggressively promoted as a convenient, low-carbon 'drop-in' substitute for diesel, heating oil and jet kerosene, requiring no modifications to engines or boilers. Its apparent simplicity makes it an attractive quick fix. Proponents claim HVO is a sustainable alternative to fossil fuels because it is manufactured from waste, like used cooking oil (UCO) and palm oil mill effluent (POME), a byproduct of palm oil processing. Using these waste products ostensibly sidesteps the well-known pitfalls of crop-based biofuels: land use change, deforestation, biodiversity loss and rising food prices. If only we had enough genuine waste oil in the world to make even a small dent in our vast oil demand. The numbers simply don't add up. Take a typical fast food restaurant, which might produce 50 litres of waste cooking oil weekly. This would produce enough HVO to fuel a typical diesel car to drive perhaps 600 kilometres. Useful, yes – possibly enough for the restaurant's delivery driver, but nowhere nearly sufficient to meet more than a small fraction of Ireland's diesel demand. There are simply not enough chip shops in the world. So, where does our imported HVO actually come from? According to data from Ireland's National Oil Reserve Agency (Nora), about half of the transport biofuel entering our market in 2024 came from UCO and POME, which are mostly imported from Malaysia, Indonesia and China, regions plagued by deforestation as a result of expanding palm oil production. Suspicion is mounting internationally about rampant fraud in these supply chains. Given lax auditing and strong financial incentives, it's disturbingly easy and attractive to pass off virgin palm oil as a waste product. The implications for the climate are dire. Many studies have show n how biodiesel from virgin vegetable oils cause similar greenhouse gas emissions as diesel, and in some cases, are much worse. According to one study, emissions from palm oil biodiesel are three times greater than those from fossil diesel, because of its association with tropical rainforest deforestation. Substituting fossil fuels with palm oil-derived HVO isn't just unhelpful, it's blatantly harmful and irresponsible. I first raised this issue in my column two years ago , calling HVO a 'life raft for the liquid fuels industry'. In many ways, the situation has deteriorated since then. 'HVO-ready boilers' are widely marketed as an easy solution to decarbonising home heating and, anecdotally, I have heard that plumbers are discouraging homeowners interested in installing heat pumps, in favour of these oil boilers. The new programme for government also commits to supporting HVO in road freight and to consider its use in older homes. Support for HVO has followed from strong advocacy and lobbying from Ireland's fuel industry and affiliated groups. A group misleadingly named the Alliance for Zero Carbon Heating (TAZCH) – actually a Coalition of trade organisations representing boiler manufacturers and fuel distributors, including Fuels for Ireland – is lobbying heavily for mandates to blend 20 per cent HVO into home heating oil. Their own research acknowledges this blended fuel would not offer significant climate benefits compared to electrification via heat pumps, and that HVO costs roughly 80 per cent more than regular heating oil. Alarmingly, HVO may also be taking off as a fuel for data centres , allowing them to claim sustainability. On the other hand, there is growing awareness of the problems with importing such dubious biofuels. Nora has flagged some of the risks in a letter to the Government this January, and it has taken steps to reduce additional incentives for POME and tighten import rules in the Renewable Transport Fuel Policy. It also commits to working at the EU level to tighten supply chain integrity. However, these are small regulatory steps, mainly covering transport, and incentives as well as loopholes remain. For example, HVO is still treated as a zero carbon fuel in our carbon budget and greenhouse gas accounting. Incremental measures won't solve the underlying issue. The core problem isn't simply inadequate regulation or unreliable supply chains; it's the fundamental unsuitability of liquid biofuels as a large-scale decarbonisation strategy. The vast majority of applications targeted for HVO use should instead be electrified or reduced through energy efficiency measures. Electrification and energy demand reduction involve complex, sometimes disruptive changes and upfront investment. While these transitions pay dividends through lower costs, healthier homes, cleaner air and genuine climate progress, inertia remains at many levels. An electricity grid that isn't yet fully ready, alongside lingering fears about heat pumps, electric vehicles and renewable infrastructure, creates a tempting but false allure for simplistic solutions like HVO. Prof Hannah Daly is professor of sustainable energy at University College Cork
