Diageo facing scrutiny in US over claims of artificially inflating sales

Smirnoff and Johnnie Walker drinks giant Diageo is reportedly being investigated by the Securities and Exchange Commission over allegations it tried to artificially boost sales figures by shipping excess inventory to distributors.

“Diageo has received an inquiry from the US Securities and Exchange Commission regarding its distribution in the United States”.

A report in the Wall Street Journal earlier today cited sources familiar with the inquiry as claiming the investigation is concerned about alleged over-shipments in the US.

Diageo said profits fell by 18% to £1.7bn, while overall sales were down 1%.

But sales in the region have been falling since 2011.

In the second half of last year the world’s biggest distiller of Scotch whisky reported a sharp fall in sales in some of its key markets.

In April, the group, which has been the subject of takeover speculation, said net sales fell 0.7pc in its third quarter on flagging global demand and the after-effects of a weak economic recovery. The stock has been relatively flat so far this year, having gained just around two percent since January.