With St. Patrick’s Day just around the corner, Guinness lovers are being warned that prices could soar 10% in the coming months.
This comes as Diageo’s finance chief Nik Jhangiani said that the company estimates operating profit could be dented by roughly $200 million if U.S. tariffs on Mexico and Canada are implemented in March.
As of March 2024, the average price of a pint of Guinness in the UK is £4.48, while in London it sits at £5.66, an 8% increase from the previous year.
If this were to increase by a further 10%, the price of a pint would sit at almost £5 and around £6.22 in London.
John J. Hardy, Global Head of Macro Strategy at investment platform Saxo, said Diageo’s warning is the company’s effort to create an insurance policy while they wait to assess the damage caused by Trump’s tariffs.
He added that while the risk to the EU is more serious, we won’t see the impact of the tariffs until next month.
John J. Hardy, Global Head of Macro Strategy at Saxo, said, “A 10% increase is a reasonable baseline estimate for tariffs on European imports, but I still think that, excluding China, tariffs are chiefly used as a threat to prompt others to do or not to do certain policy moves.
“Just like us, Diageo has no idea where the Trump administration will end with these tariffs. The now-you-see-them, now-you-don’t tariffs against Canada and Mexico are likely mostly meant to encourage more companies to invest in the US, rather than that we see the US sustaining high tariffs against those two countries for a long period.
“The EU tariff risk is probably more serious, but we won’t know how the tariffs, “reciprocal” or otherwise, might shape up after the April 2 deadline and whether there is a material risk of a trade tiff.
“Diageo’s move to warn of a potential loss on tariff impacts is like the prudent purchase of an insurance policy as they try to assess the potential downside risks to their future results in a “base case” scenario of tariffs being implemented. This allows them to justify the risk of weak performance beforehand and to claim some positive news upside should the tariff impact prove far smaller.”
