The US Securities and Exchange Commission (SEC) has launched an investigation into whether alcoholic beverages company Diageo has been shipping excess inventories to distributors in a bid to boost its results.

People familiar with the inquiry said the UK company, which owns Smirnoff and Johnnie Walker, was believed to have sent excess cases to distributors than they had ordered to report increased sales and shipments.

Diageo spokeswoman told media sources: "Diageo is working to respond fully to the SEC’s requests for information in this matter."

The Wall Street Journal learnt from the company that it received an inquiry from the US regulator with regard to its distribution in the country.

In January, Diageo chief executive Ivan Menezes said during a call with analysts that it was reducing the level of inventory distributors would carry in order to gain better visibility on customer depletions.

BBC reported that the US market accounts for nearly $18bn of the company’s annual sales, but they have been witnessing a decline since 2011.

Diageo’s brands include Smirnoff, Johnnie Walker, Baileys and Guinness. The company also owns 34% of Moët Hennessy, which owns brands including Moët & Chandon, Veuve Clicquot and Hennessy.