DRINKS group Diageo admitted yesterday that the devastating hurricanes that buffeted the US this summer had hurt its performance.

The maker of Johnnie Walker whisky and Smirnoff vodka confirmed business had been lost in the south-eastern states of the US because of hurricanes Katrina, Wilma and Rita.

Weak sales of Guinness in Europe and the ongoing decline in demand for ready-mixed alcoholic drinks have also given bosses a headache since the end of June.

In the US, Diageo is hoping for a glut of orders for its brands over the next six months as retailers and other customers restock their shelves following the storm-related disruption.

In the update yesterday, chief financial officer Nick Rose said the increase in oil prices to a record level of $70.85 a barrel in the wake of Hurricane Katrina would cost Diageo an additional £20m this year.

This would be countered by the high operating margins within the business and ongoing efforts to find savings, he added.