London, May 1, 2026, 14:43 BST
Diageo shares rose on Friday after U.S. President Donald Trump said he would lift tariffs on British whisky, a trade break for the Johnnie Walker maker as it tries to steady weak U.S. sales. Diageo said it “warmly” welcomed the news, and its London-listed shares rose as much as 3% in early trade, Reuters reported. Reuters
The timing matters. Diageo reports its fiscal third-quarter trading statement on May 6, and investors are looking for signs that North America, a weak spot in recent results, has stopped dragging on the group.
The tariff relief also lands early in Chief Executive Sir Dave Lewis’s reset of the Guinness and Smirnoff owner. In February, Diageo cut its fiscal 2026 organic sales outlook, meaning sales growth stripped of currency and acquisition effects, to a 2%-3% decline and halved its interim dividend after weaker demand in the United States and China.
U.S. Trade Representative Jamieson Greer said the United States and Britain had decided to allow “preferential duty access” for whiskey produced in the United Kingdom as part of an economic prosperity deal. Preferential duty access means import terms better than the normal tariff rate. United States Trade Representative
For Diageo, the direct benefit sits in Scotch, where Johnnie Walker is the headline brand. The group also sells Guinness, Don Julio tequila, Captain Morgan rum and Tanqueray gin, but the trade move is aimed at U.K.-made whisky, not the full drinks cabinet. Reuters data describe Diageo as a U.K.-based premium drinks maker with brands across spirits and beer.
Industry groups moved quickly to frame the decision as more than a political gesture. Mark Kent, chief executive of the Scotch Whisky Association, called the move a “significant boost” and said distillers could “breathe a little easier” after months of pressure. FoodBev Media
Chris Swonger, president and chief executive of the Distilled Spirits Council of the United States, said removal of the 10% tariff on U.K. whisky would be a “major victory” for U.S. hospitality businesses and would restore a zero-for-zero trade model for spirits. Distilled Spirits Council
The competitive read is mixed. Pernod Ricard and Brown-Forman have also been under scrutiny as spirits demand softens; Reuters reported this week that Brown-Forman shares fell after the Jack Daniel’s maker and Pernod Ricard scrapped merger talks, putting attention back on a tougher demand backdrop.
Diageo’s own numbers show why the tariff issue hit a sensitive moment. For the six months ended Dec. 31, reported net sales fell 4.0% to $10.5 billion, organic net sales declined 2.8%, and the company said softer North America performance reflected pressure on U.S. disposable income and competition from cheaper alternatives.
But the tariff cut is not a cure for all of Diageo’s problems. The Scotch Whisky Association estimates the 10% tariff imposed last year cost producers about 150 million pounds in lost sales, and industry sources told The Guardian it could take months or years to recover lost U.S. market share.
The next test comes next week. A cleaner tariff backdrop may help sentiment, but investors will still want evidence that Lewis can repair U.S. spirits demand, protect margins and cut leverage without starving brands of investment.
