Diageo warns MPs on hard Brexit costs

Guinness and Baileys maker Diageo and travel company TUI have warned about the costs of a hard Brexit.

Diageo said Brexit could cost it tens of millions if the UK did not replicate the EU’s trade deals with other countries for Scotch whisky and keep an open border in Ireland. Dan Mobley, the drinks company’s head of corporate relations, said losing the benefits of EU trade deals with so-called third countries such as South Korea, Colombia and South Africa would be unwelcome.

He said the introduction of border controls in Ireland would hinder its supply chain, and hurt its many small suppliers. Scotch whisky accounts for about a quarter of Diageo’s £12bn (€13.6bn) turnover, while Scotch is the UK’s biggest food and drink export, worth around one-fifth of the total.

“For us to lose the benefits of [EU] trade deals would be unwelcome, but it would be manageable, it would be tens of millions of pounds lost, rather than hundreds of millions,” Mobley told a parliamentary scrutiny committee in London.

Mobley said Diageo made Baileys using ingredients from north and south. He said Diageo had advised the Irish and British governments about technical measures that could relieve pressures on any new controls, but retaining an open border was preferable.

“We would much rather what was agreed last week, which is for an open border,” he said. “We are heartened that all sides say that’s what they want, but we need to now see the details,” he said.

TUI says it is putting contingency plans in place for Brexit, aiming to address potential problem areas such as flying rights, and visa requirements.

Reuters