Diageo CEO: Duty Free trade for UK a ‘real boost for jobs and drinks sector’

Diageo’s chief executive Ivan Menezes talks confidently about meeting the challenges of Brexit, which is now just eight months away and with negotiators facing a mountain of work to reach agreement timetabled for October.

Diageo’s chief executive Ivan Menezes

“We want frictionless trade with the EU. There are no tariffs with the EU and whatever happens we can only make scotch whisky in Scotland so we don’t have to change anything,” he says. “We want no border in Ireland, which is what everybody wants, and the third thing is the ability to get free trade agreements elsewhere.”

That is very much the party line among leaders of big business, but Menezes sees a big plus for drinks manufacturers in Britain leaving the EU next year.

“There will be a big benefit of getting Duty Free trade back for the UK, which we would see as a real boost to jobs and the [drinks] sector,” he says.

The booze cruise may be heading for a revival.

“We plan for the eventualities about how it plays out over the next few months or quarters but this [Brexit] is something Diageo will take in its stride. Unlike companies in other sectors we don’t have massive decisions to make on supply chains for manufacturing,” says Menezes, probably thinking of the car industry.

But with “no deal” being increasingly presented as a possibility, John Kennedy, the president of Diageo’s European division, acknowledges that there might be logistics bottlenecks, especially at crowded ports such as Dover or Harwich and the Channel Tunnel.

“Diageo trucks make 16,000 journeys a year across the Irish border alone,” he says, “and that is without all the traffic involving our suppliers delivering goods to our distilleries and packaging plants.”

The implication is that any impediment to traffic flows will not be helpful.

So will Diageo seek to put extra shipments of Scotch and other spirits into the EU in advance of Brexit to smooth the transition? Kennedy smiles enigmatically.

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