British drinks powerhouse Diageo has revealed it is bracing for a £111million hit from US tariffs, despite the UK government having secured a trade deal with former US President Donald Trump.
The FTSE 100 firm, behind household names like Guinness, Smirnoff, and Johnnie Walker, told The Sun it will be impacted by a ten per cent baseline tariff on imports — a blow to one of Britain’s leading exporters.
Chief executive Debra Crew confirmed the company will look to absorb the higher costs through various measures, including price hikes in the US, which could soon leave American drinkers paying more for their favourite tipples.
She said: “We still have no plans to offload Guinness.”
Diageo’s flagship export Johnnie Walker — classified as Scotch and therefore not eligible to be produced outside the UK — is set to take the brunt of the new charges. The whisky giant recently launched a promotional campaign in partnership with Netflix’s hit series Squid Game, featuring limited edition bottles.
The revelation adds fuel to growing criticism that Keir Starmer’s trade arrangements, while benefiting industries such as automotive manufacturing, may be sidelining major exporters in other sectors.
However, there has been some relief for the drinks firm. Fears over a 25 per cent tariff on Mexican spirits have not materialised — good news for Diageo’s other brands, including Don Julio tequila and Crown Royal whisky.
Ms Crew struck a more optimistic note over the UK’s recent trade deal with India, describing it as a major breakthrough. The agreement opens access to the world’s largest whisky market, with Diageo also launching Godawan, a single malt whisky crafted in Rajasthan, India.
In a strategy to boost its financial outlook, Diageo has outlined plans to generate £373million in cost savings and is considering offloading a number of brands.
Chief financial officer Nik Jhangiani suggested these would be more significant than previous moves: “The dismissals would be above and beyond the small disposals seen in recent years.”
Despite speculation, Guinness remains firmly on Diageo’s books. Analysts say it remains central to the group’s strategy.
Richard Hunter, from Interactive Investor, said: “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.”
