- A hard border between Northern Ireland and Republic of Ireland after Brexit risks increasing the cost of consuming Guinness in the UK. “I’d like to get more clarity on what’s going to happen and then we’ll deal with that,” Charles Ireland, head of Diageo’s operations in Great Britain, Ireland, and France, said. Theresa May has pledged to pull the UK out of both the EU’s single market and the customs union.
LONDON – A “hard Brexit” has the potential to increase the cost of importing Guinness to the UK, according to a senior executive at drinks giant Diageo.
Charles Ireland, who oversees Diageo’s operations in Great Britain, Ireland, and France, told Business Insider: “If there is a hard border, it will make it more complicated and more expensive.”
“Our Guinness is produced in Dublin. Great Britain is the largest consumer of Guinness anywhere in the world these days and therefore a very important supplier to Diageo’s GB business is our brewery in Ireland.”
The Republic of Ireland is an EU member. Northern Ireland, with whom it shares a border, will leave the EU after March 2019 as part of Brexit. Ireland and the UK don’t want a “hard border” – customs and passport checks for all parties passing between each territory – after Brexit.
However, EU law means it looks very unlikely that a soft border will be possible. Theresa May has pledged to pull the UK out of both the EU’s single market and the customs union. The EU would therefore likely require checks on goods coming into Ireland and vice versa.
In recent weeks the Irish government has reportedly moved towards backing a new sea border between mainland Britain and Northern Ireland after Brexit in order to prevent smuggling.
Diageo’s Ireland told Business Insider: “From a pure logistics perspective, I would prefer if we don’t have more administration and complexity. I know these things are being much discussed and worked through. I’d like to get more clarity on what’s going to happen and then we’ll deal with that.”
Asked if a “hard Brexit” has the potential to increase the cost of Guinness in the UK, Diageo’s Ireland was circumspect, saying: “We always look very carefully at pricing as part of our mix.”
He added: “Obviously, from a business perspective, we really like certainty. To get some of the details finalised so that we and others really understand them would be our preference.”
Diageo’s Ireland was speaking to Business Insider for International Beer Day on Friday. Ireland said that Diageo planned to launch more beers under its Open Gate Brewery brand after the success of Hop House 13 Lager, which launched in 2015 and had sales of £33 million last year.
“We have shifted our thinking externally from being a brewer of Guinness to being a brewer of beers,” he said. “I think Open Gate Brewery will continue to bring new brands and new liquids to consumers. Hop House 13 has been by far our most successful beer innovation in recent years.”
He added: “At the moment, consumers are really interest in craft beers, beers with a little bit more flavour, beers which are potentially a little bit different to the beers they might have been drinking a few years ago.
“We have experimented with our Open Gate Brewery and we have a test brewery in Dublin where we create new brews and invite the public into a bar space at the test facility and allow them to try our new products and give us feedback on them. The most popular ones we’ll bring into the market and into full commercialization. There are a number of those which are ongoing at the moment.”
Stout is the fastest growing type of beer globally, according to market research firm Euromonitor, recording a 5.8% growth in global consumption in 2016.
As well as Guinness, Diageo owns well-known spirits such as Smirnoff Vodka, Captain Morgan Spiced Rum, Johnnie Walker whiskey, and Bailey’s liqueur.