By Owain Johnson

The market for spirits in Venezuela is likely to shrink by 25-30% this year, according to Diageo Venezuela president Stephane Bardinet. Diageo currently possesses a 30% share of the national alcohol market, excluding beer sales.

Venezuela is currently suffering a major political and economic crisis, and Bardinet warned that a contraction "is inevitable given the current situation."

The company president said most figures suggest a 25-30% contraction, but he added that the company is also preparing itself for a possible fall in consumption of as much as 45%. "All the indicators are down," Bardinet noted.

The Diageo boss said the recent devaluation in the national currency, the bolivar, had forced the company to raise the prices of imported premium brands by up to 60% in recent months, although he said prices would be readjusted if the bolivar gained ground against the US dollar.

In response to the difficult trading conditions, Diageo plans to refocus its business strategy and concentrate primarily on promoting its key brands: Johnnie Walker, Smirnoff, J&B, Bailey's, Tanqueray, Guinness, Cuervo and Captain Morgan.

The company is not, however, planning to make redundancies in the near future. Bardinet said he was still hopeful about the long-term prospects for the Venezuelan market and predicted that the first signs of recovery will appear in December.