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Diageo CEO: Brexit will have no ‘material impact’
Johnnie Walker maker Diageo has played down the impact of Brexit on the company and is “very confident” about stock levels.
Diageo CEO Ivan Menezes said Brexit could have long-term “potential upside opportunities”
Speaking at a media briefing yesterday following the publication of the group’s H1 results, CEO Ivan Menezes said that the UK-based firm is “very keen to get to a deal in the next few weeks”.
“We don’t see a material impact to the company out of the Brexit outcomes but we very definitely want a deal and we’re working very closely with the government and publicly supporting the need to get to a deal,” Menezes said.
The UK is due to leave the European Union on 29 March 2019.
He added that Diageo “is in a relatively privileged position” compared to other industries when it comes to the impact of Brexit.
“Our supply chain is more indigenous and simple,” he said. “So if you think of what we make in Scotland, it’s water, barley, peat, women, men and lots of time, whisky resting on hills and then exported at very high value. So our ability to manage supply chains relative to other industries is better.”
Menezes said the long-term “potential upside opportunities” are new free trade deals and the “return of duty free to the UK”.
“Final point I’d say is that there are some countries where the EU has free trade agreements where we are working very closely with the UK government and the UK government is working with those countries to ensure that the UK gets the same arrangements as exist today for the EU. Should those not happen, they’re still manageable and they are not on a scale to be material to the government.”
Menezes added that Diageo’s “stock levels are appropriate” and “kept at the right level”.
David Cutter, president of global supply and procurement, said the company is “very confident” about stock levels.
He said: “We manage the end-to-end supply chain all the time and we manage all forms of volatility, nothing out of the ordinary is in place for us.
“We ship to warehouses around the world to satisfy the needs of what’s coming out, so nothing in terms of pre-shipments, nothing over and above normal.”