Yahoo Finance World's largest producer of spirits doesn't think it'll be 'materially' impacted by Brexit
Diageo (DGE.L), the world’s largest producer of spirits, said that even if there is a no-deal Brexit, “the direct financial impact to Diageo will not be material.”
In its results statement in the six months to 31 December this year, the maker of Johnnie Walker and Guinness said:
“There continues to be uncertainty with respect to the process surrounding the United Kingdom’s proposed exit from the European Union and the eventual outcome of the ongoing Brexit negotiations. We continue to believe that, in the event of either a negotiated exit or no-deal scenario, the direct financial impact to Diageo will not be material.
“In the EU, we expect that our finished case goods will continue to trade tariff free in either scenario. While there continues to be uncertainty over future trading arrangements between the UK and the rest of the world, we have mitigation plans in place for the short-term disruption that could arise from a ‘no deal’ scenario; in which the UK leaves the EU on the current deadline for exit, under the Article 50 notification of 29 March 2019, without the parties reaching a formal withdrawal agreement approved by the UK Parliament, and including the inability of the UK Government to renew existing EU Free Trade Agreements with third party countries to which we export and where trading could revert to WTO rules.”
Diageo reported a rise in profits to £2.6bn from £2.2bn. Sales also increased to £10.3bn, from £9.9bn.
Diageo’s statement is at odds with a number of food and drink suppliers across Britain.
France’s LVMH Moet Hennessy Louis Vuitton (MC.PA), which makes high-end beverages like Moet & Chandon as well as designer clothing, said this week that it is stockpiling four months worth of wine and spirits in preparation for Brexit.
Supermarkets Tesco, Sainsbury’s, Asda, and Morrison’s have also asked their main suppliers to ramp up stock over shortage concerns. Aldi has already considered stockpiling food as part of its preparations for Brexit but CEO Giles Hurley has said that Aldi’s increased fresh food range would make this more difficult.
