UK & Ireland: Diageo says Irish border control could cost it £1.3 mln a year

At last, one company has been bold enough to put a figure on the potential cost were border controls to be set up between northern Ireland and the Republic of Ireland, the Financial Times reported on December 13.

Diageo, the world’s biggest Scotch producer and Guinness brewer, said on December 13 that if trucks had to wait 15 minutes to clear the border, it estimated this would cost the company £1.3 mln a year.

Dan Mobley, Diageo’s corporate relations director, said the company treated the island of Ireland as one business. Guinness is brewed in Dublin, then crosses the border to be packaged, before crossing back into Ireland to be exported, he said.

He was giving evidence about the impact of Brexit on food and drink producers to MPs on the Business, Energy and Industrial Strategy Committee.

Bailey’s, Diageo’s cream-based whisky brand, is manufactured on both sides of the border and the company, which buys 11 per cent of Ireland’s cream output for Bailey’s, sources its cream from both the north and south.

“We are moving about 18,000 trucks a year over that border, so even small hold-ups to process those truck movements would be really unwelcome, but the big problem would be for our suppliers,” said Mr Mobley, adding that the £1.3 mln was not big in the context of Diageo’s annual net sales of £12 bln.

He welcomed last week’s agreement between Theresa May, the UK prime minister and the European Union to keep Northern Ireland’s regulatory regime in “full alignment” with EU law.

Mr Mobley also said that Diageo had advised both the UK and Irish governments on possible technological solutions to keep traffic flowing across borders, based on its experience of the US-Canada border

The company exports bourbon from the US to Canada and Canadian whiskey to the US. An average crossing takes 15 minutes.

He said “It’s not completely frictionless but it does allow relatively quick movement across the border. We’d much rather an open border though.”

Some politicians have said suggested technology can minimise border delays.

Ian Wright, director-general of the Food and Drink Federation, representing UK manufacturers, told the committee, “In my experience, when politicians say there’ll be a technological solution, it means they haven’t got a clue.”

Asked whether no deal would be better than a bad Brexit deal, Mr Wright said: “No”, adding the statement was “vacuous tosh.” He forecast food price inflation of at least 7 per cent if there were to be no Brexit deal.

However, Tim Martin, founder and chairman of the JD Wetherspoon pub chain, said the price of a meal in one of his pubs would fall by an average of 3p if the UK decided to eliminate tariffs on food, post-Brexit.

12 December, 2017