Diageo warns against Britain leaving EU

Diageo has advised Britain against leaving the EU, warning it could have a detrimental effect on the success of the company’s whisky exports, which rely on the Union’s global trade deals.

Diageo has warned Britain not to leave the EU as it relies on the union’s global trade deals

According to a report by the Financial Times, Diageo’s chief executive Ivan Menezes has said it would be tougher to sell British-made brands around the world without the advantages of the EU’s 31 international trade agreements. The UK is Diageo’s largest production centre and thanks to whiskies such as Johnnie Walker and Talisker, the company is Scotland’s top manufacturing exporter.

Scotch whisky exports are one of the UK’s leading sources of exports revenue, generating £3.9 billion in 2012 and represent 30% of Diageo’s sales and operating profits.

“The major benefit for Diageo, for our industry, is in global trade and in having the EU as a significant bloc promoting global trade,” Menezes told the FT. “We benefit from and support the UK being in the EU.”

He continued to explain that Diageo needed the “efficiency” of the European single market to guarantee its EU business did not have to contend with different labelling rules or intellectual property rights across countries.

However, Menezes would neither confirm nor deny whether Diageo would move operations out of the UK if Britain were to leave the EU. He said he expected Diageo to stay in the UK while it had the “right environment to compete globally” but refused to say if the company would remain in London if Britain voted to leave.

“The rest of the world is not standing still,” he said, “The emerging markets are formidably competitive and the US is a formidable competitor.”