British beverages major Diageo said its first-quarter net sales declined 1.7% on a reported basis and 1.5% organically, with weak volume.

The firm attributes the decline to negative foreign exchange, mainly in respect of the devaluation of the Venezuelan bolivar, the effect of full consolidation of United Spirits Limited, as well as the termination of the transitional arrangements following the disposal of Jose Cuervo.

Geographically, organic growth in North America edged up 0.1%, with broadly unchanged consumer trends.

European sales dropped 1.4%, hurt by declining net sales in Russia and Eastern Europe as a result of weak consumer confidence and the uncertainty arising from events in Ukraine. In Western Europe, net sales declined 1%.

In Africa, although Nigeria was weak, performance was strong in Diageo’s Africa Regional Markets and East Africa.

Sales in Latin America and Caribbean region dropped 1.4% as good performance in main domestic markets were offset by weak sales in Brazil as price increases were taken in some states to align prices across the country.

Also, sales in Asia Pacific’s declined 7.4% in the quarter, reflecting the decision to reduce inventory levels in South East Asia and the continued challenging trading environment in mainland China.

In contrast, India and Global Travel Asia and Middle East delivered good growth.

Looking ahead, Diageo chief executive Ivan Menezes said, "We expect full year top line growth to improve on last year’s performance. Our focus on our six performance drivers continues to build our capabilities and deliver the cultural change I want to see across the business. I am confident we are on the road to realise our full potential."