Diageo, the drinks giant behind Guinness and Johnnie Walker, has revealed it faces a £111 million hit from US tariffs, despite the UK government having secured a trade deal with Donald Trump
British drinks giant Diageo is bracing itself for a substantial £111million setback due to US tariffs, despite a trade deal previously agreed with ex-US President Donald Trump.
The FTSE 100 company, famous for brands such as Guinness, Smirnoff, and Johnnie Walker, disclosed to The Sun that it will be hit by a ten per cent baseline tariff on imports – striking a blow to one of the UK’s prominent exporters.
Diageo’s chief executive Debra Crew has stated that they’re considering various strategies to manage the increased costs, including raising prices in the US, hinting that American consumers might be shelling out more for their beloved drinks.
She remarked: “We still have no plans to offload Guinness.”
Johnnie Walker, Diageo’s marquee export recognised globally as Scotch which mandates UK production, faces the dire impact of these fresh tariffs. In an innovative marketing move, the whisky behemoth recently rolled out a promotional alliance with Netflix’s smash hit ‘Squid Game’, featuring exclusive edition bottles, reports the Express.
READ MORE: Single Brits would rather do this on a date rather than chat over a glass of wineREAD MORE: Simple reason why women get worse hangovers than men – it’s not what you think
This latest development intensifies the scrutiny of trade deals negotiated under Keir Starmer’s leadership, suggesting that while some sectors such as car manufacturing may profit, critical exporting industries could be neglected.
The average cost of a UK pint of Guinness is £4.48, up from £4.15 just a year ago.
Nevertheless, the beverage titan has found some solace. Alarming prospects of a hefty 25 per cent tariff on Mexican spirits have not come to pass, spelling good tidings for other Diageo labels like Don Julio tequila and Crown Royal whisky.
Ms Crew expressed positivity regarding the UK’s latest trade deal with India, hailing it as a significant breakthrough.
The pact paves the way into the world’s biggest whisky market, coinciding with Diageo’s launch of Godawan, a bespoke single malt whisky produced in Rajasthan, India.
To enhance its fiscal forecast, Diageo has disclosed intentions to save £373 million in costs and contemplates ditching several brands.
Nik Jhangiani, the chief financial officer, hinted at notable cutbacks: “The dismissals would be above and beyond the small disposals seen in recent years.”
Rumours aside, Guinness is staying put on Diageo’s slate. Experts argue that it is key to the conglomerate’s game plan.
Richard Hunter, of Interactive Investor, commented: “Guinness accounts for two-thirds of Diageo’s beer sales and it appears this jewel in the crown is one Diageo is keen to protect.”
