It also said trading had deteriorated in the fast-food industry over the past three months, bringing speculation that the £1.45bn sale of its Burger King fast-food chain to a consortium led by Texas Pacific Group, the private equity firm, may need to be renegotiated. Diageo said it was "continuing to work" with the consortium towards concluding the sale.
Diageo also said the notional deficit in its pension fund measured under the new FRS17 accounting standard had increased from £366m at June 30 to about £950m as stock markets plunged.
The triple-whammy of bad news sent the group's shares down nearly 8%. However, Lord Blyth of Rowington, chairman of Diageo, told the AGM yesterday that the company had had a very good year.
It said in Ireland the successful introduction of Smirnoff Ice on Draught has resulted in volume growth and good share gains for Diageo in the ready to drink category.