London, May 1, 2026, 14:43 BST
Diageo got a lift Friday, climbing as much as 3% in London after U.S. President Donald Trump pledged to scrap tariffs on British whisky—a potential boost for the Johnnie Walker parent as it faces sluggish U.S. demand. The company called the move “warmly” welcomed. Reuters had the story. Reuters
Timing is key here. Diageo puts out its fiscal third-quarter trading update on May 6, with investors watching North America closely—recently the group’s trouble spot—for any sign the drag is easing.
The tariff break arrives just as Chief Executive Sir Dave Lewis begins reshaping Diageo, the company behind Guinness and Smirnoff. Back in February, Diageo slashed its forecast for fiscal 2026 organic sales—down 2% to 3%, excluding currency swings and M&A—and chopped its interim dividend in half, stung by softer demand out of the U.S. and China.
Jamieson Greer, the U.S. Trade Representative, said the United States and Britain agreed to grant “preferential duty access” to whiskey made in the UK, under an economic prosperity agreement. That move lets UK whiskey enter with better import terms than standard tariffs. United States Trade Representative
Diageo stands to gain mainly in Scotch—Johnnie Walker leads the lineup. While the company’s portfolio includes Guinness, Don Julio tequila, Captain Morgan rum, and Tanqueray gin, this particular trade action targets U.K.-produced whisky specifically, not the wider selection. Reuters data notes Diageo as a U.K.-based premium drinks maker with a range that spans both spirits and beer.
Industry groups wasted no time pushing back on the idea that this was just political theater. Mark Kent, Scotch Whisky Association chief executive, described the decision as a “significant boost” for the sector, adding that distillers could “breathe a little easier” after facing months of strain. FoodBev Media
Chris Swonger, who heads up the Distilled Spirits Council of the United States, called the end of the 10% tariff on U.K. whisky a “major victory” for American hospitality firms, adding that it brings back the zero-for-zero trade model for spirits. Distilled Spirits Council
Signals from competitors are all over the map. Pernod Ricard and Brown-Forman have both faced questions lately, with spirits demand showing cracks. This week, Brown-Forman shares slipped after Reuters said merger talks with Pernod Ricard were off the table for now—leaving investors to wrestle with the muted demand outlook.
Diageo got caught at a tough time, with its own results laying it out: for the half-year ended Dec. 31, reported net sales dropped 4.0% to $10.5 billion. Organic net sales slid 2.8%. The company pointed to weaker numbers in North America, blaming squeezed U.S. disposable income and more drinkers turning to lower-priced rivals.
Still, dropping the tariff doesn’t wipe out all of Diageo’s issues. According to the Scotch Whisky Association, that 10% tariff slapped on last year left producers short about 150 million pounds in sales. And industry insiders told The Guardian it may take months—possibly years—to claw back lost ground in the U.S. market.
Another test is set for next week. A streamlined tariff environment might boost sentiment, though investors remain focused on whether Lewis can actually revive U.S. spirits demand, defend margins, and reduce leverage—without shortchanging the brands on investment.
