London-based brewer Diageo plc is trying to desperately save face after the many quarters of sales fiascos reveled about the company in recent times. First the “anti-extravagance" campaign held in China, then the receding sales from the spirits market of the U.S., lower revenues from acquisition deals and hostile currency situations in many key markets have all added to the concerns of this renowned brewer. In the past few quarters, the company has observed significant decline in sales volumes. In the recently reported third quarter of this year, the company records show that sales volume went down by 0.8% and revenue reduced by 0.7% year over year.
The shares of the company dropped a further 2% on 27th of July since 23rd of July when the Securities and Exchange Commission (SEC) of the U.S. had announced that it will start an investigation about the complaints regarding the company misrepresenting its sales numbers.
The decision to begin the investigation has come after rumors were heard that the company was manipulating its sales data to inflate profit.
According to a report published in this regards in the Wall Street Journal on July 23rd, the company that owns the vodka brand Smirnoff was shipping excessive inventory to its distributors to increase its results.
Many shareholders rights firms, including Goldberg Law PC and Hagens Berman Sobol Shapiro LLP, are investigating about the amount of losses incurred by shareholders due to the manipulations made by the company in sales figures.
Diageo is also the owner of leading alcohol brands such as Ciroc, and Johnnie Walker, along with Smirnoff. The company was also warned of manipulating its accounting figures in March 2015 by Cooper Investors Pty Limited which accused Diageo of inflating sales figures.