Diageo, the FTSE 100 company behind Guinness, Smirnoff and Johnnie Walker, confirmed its US exports will be hit by an extra 10 per cent tax, despite a US-UK trade deal

04:50, 20 May 2025Updated 05:05, 20 May 2025

The cost of a pint of Guinness is set to rise(Image: (Image: Getty))

British drinks giant Diageo is set for a hefty £111million blow due to US tariffs, despite the UK’s trade deal brokered with ex-President Donald Trump.

The company, known for brands such as Guinness, Smirnoff, and Johnnie Walker, confided to The Sun it will face a ten per cent baseline tariff on imports, dampening spirits for one of Britain’s principal exporters.

CEO Debra Crew has asserted that they will try to mitigate the higher costs with various strategies, which may include price increases in the US – potentially raising the bar tab for fans of their libations.

Crew stated: “We still have no plans to offload Guinness.”

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The trade winds are particularly gusty for Johnnie Walker, the Scotch whisky which cannot be produced outside the UK, leaving it most exposed to the incoming tariffs. This comes as the brand steps up its marketing game, collaborating with Netflix’s blockbuster ‘Squid Game’ for special edition bottles, reports the Express.

This disclosure stokes further debate around Keir Starmer’s trade negotiations, suggesting that while some industries like the car sector rev up, others, including key exporters, could be left in the rear-view mirror.

The average cost of a UK pint of Guinness is £4.48, up from £4.15 just a year ago.

Despite this oncoming storm, Diageo can toast to one piece of good news: the anticipated 25 per cent tariff on Mexican spirits, which would have hit their Don Julio tequila and Crown Royal whisky lines, has not come to pass.

Ms Crew expressed optimism about the UK’s recent trade deal with India, calling it a significant breakthrough. The deal grants access to the world’s largest whisky market, and Diageo has also introduced Godawan, a single malt whisky crafted in Rajasthan, India.

Diageo is strategising to enhance its financial prospects by aiming to save £373 million in costs and is contemplating the sale of several brands.

CFO Nik Jhangiani indicated that these disposals would be more substantial than those in the past: “The dismissals would be above and beyond the small disposals seen in recent years.”

Despite rumours, Guinness is still very much part of Diageo’s portfolio. Analysts believe it plays a crucial role in the company’s strategy.

Interactive Investor’s Richard Hunter 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.”