Exclusive - UK: Diageo calms Unite tax avoidance challenge

By | 13 March 2013

Diageo is "avoiding paying what it is due” in the UK, Unite has claimed

Diageo is "avoiding paying what it is due” in the UK, Unite has claimed

Diageo has clarified claims by UK trade union Unite that the drinks giant is not “paying what it is due” in tax in the country.

Earlier this week, Unite responded to Diageo's announcement that it will cut back its regional supply structures in favour of transferring local operations to its 21 "key" global regions. In its subsequent statement, Unite, which represents 1.5m workers across a variety of sectors in the UK, claimed that Diageo “prefers to pay its tax via Amsterdam to avoid paying what it is due in this country”.

When contacted by just-drinks yesterday (12 March), however, a spokesperson for Diageo countered the claim that the firm is avoiding paying its taxes in the UK.

“We moved a number of our brands to the Netherlands in 1998, and established that as our marketing centre,” the spokesperson said. “We’ve subsequently based other brands there, given this is where many of our most senior marketers are based.”

Since making the move, Diageo has had its operations “thoroughly reviewed” by Her Majesty's Revenue & Customs (HMRC), the spokesperson added. 

The review, which took place in 2008, was backed by a further probe by the UK's National Audit Office last year, the spokesperson said.

Around 100 Diageo brands are handled out of Amsterdam, including Johnnie Walker, J&B, Ketel One, Tanqueray and Gordon’s. “The Netherlands represents an important logistical centre for Diageo,” the spokesperson concluded. “The bulk of our product is shipped around the world from Rotterdam.”

Expert analysis

Diageo plc - SWOT, Strategy and Corporate Finance Report

Diageo plc - SWOT, Strategy and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings, detailed financials, and corporate actions, providing a 360° view of the company.

Sectors: Beer & cider, Legislation, Spirits, Wine

Companies: Diageo, Johnnie Walker, Tanqueray

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