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3d ago

Diageo Projects $150M Annual Profit Loss from U.S. Tariffs, Launches $500M Cost-Saving Plan

The global spirits leader aims to offset half the impact of new tariffs on UK and EU imports through mitigation strategies and operational efficiencies.

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 loss due to a 10% U.S. tariff on UK and EU imports, effective this year.
  • The company plans to mitigate around half of the tariff's impact through pricing actions, cost controls, and supply chain adjustments.
  • A $500 million, three-year cost-saving initiative, 'Accelerate,' has been launched to improve efficiency and free up cash flow.
  • Diageo reported a 5.9% organic net sales growth in Q3, supported by distributors pulling forward shipments ahead of tariffs.
  • Relief from exemptions on Mexican and Canadian imports under USMCA reduced the earlier projected tariff impact from $200 million to $150 million.