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yesterday

Diageo Faces $150M Annual Profit Hit Following New US Tariffs

The world's largest spirits maker unveils a $500M cost-saving plan to counteract the impact of a 10% tariff on UK and European imports.

A liquor store worker places a bottle of Diageo's Crown Royal whiskey on a shelf in Los Angeles, California, U.S., December 4, 2024. REUTERS/Daniel Cole/File Photo
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Overview

  • Diageo estimates a $150 million annualized profit reduction due to a 10% US tariff on UK and European imports, introduced in April 2025.
  • The company plans to mitigate roughly half of the tariff's impact through pricing adjustments, supply chain efficiencies, and cost management measures.
  • A new $500 million, three-year cost-saving initiative, called 'Accelerate,' has been launched to strengthen cash flow, reduce debt, and support reinvestment.
  • Third-quarter organic net sales grew by 5.9%, reaching $4.37 billion, partly driven by distributors stocking up ahead of the tariff implementation.
  • CEO Debra Crew attributes current challenges to macroeconomic pressures, emphasizing the company's confidence in its ability to navigate the evolving trade landscape.