How Brexit and the Irish border could affect your Baileys or Guinness

13-Dec-2017 - Last updated on 13-Dec-2017 at 13:19 GMT

Border unwelcome: Diageo says Ireland is one of its biggest priorities in the Brexit negotiations

Diageo has said that Ireland is one of its biggest priorities in the Brexit negotiations, and that a hard border would be "very unwelcome".

Giving evidence today (13 December) as part of the Business, Energy and Industrial Strategy's (BEIS) committee enquiry into Brexit and the implications for UK business: processed food and drink, Dan Mobley, corporate relations director for Diageo, described how a hard border between Northern Ireland and Ireland would affect the company.

"We run the island as one business, and we manufacture our products on both sides of the border in a seamless supply chain," he said.

"So, for us we are brewing, for instance, Guinness in Dublin, we will be shipping the product over the border to be packaged, and then either exporting or maybe brought back into Ireland to be exported.

"Similarly, Baileys is manufactured on both sides of the border. The dairy that we use in Baileys in being sourced both sides of the border.

"We buy 11% of Ireland's cream output to make Baileys, so for us we could manage a hard border, of course, we are a large company. But, a hard border would be very unwelcome. We are moving about 18,000 trucks a year over that border."

Really unwelcome

Mobley said even small hold ups to process those truck movements would be "really unwelcome", but the big problem would be for the company's suppliers.

"If you think of the smaller or medium-sized companies, particularly in the dairy industry, if they are having to cross that border and face new tariffs that would be a big problem for them and could cause disruption in our supply chain," he continued.

Questioning Mobley, MP Rachel Reeves asked what implications this could have on costs if trucks are held up at a hard border.

Mobley answered: "We have made an attempt of estimating that, it would cost around £1.3m a year. In the context of a company that has £18bn in global sales it's manageable, but unwelcome.

"The real problem would be for the suppliers. It would be easy for us to manage that, it's for the smaller companies that are moving across the border."

Meaningful cost

Reeves then questioned if this £1.3m could add on to a bottle of Baileys, to which Molbey said it would not add a "meaningful cost", but assured MPs that it would "not add cost to the price you pay for Baileys if you go into a pub".

"Our main concern is for the supply chain, those people who are going to be affected because there may be tariffs on the dairy inputs across the border and there will be admin delays that we as a large company can swallow, that smaller suppliers will find more difficult," he said.