Diageo does not fear impact of US tariffs on Fife bottling plant

Drinks giant hints that jobs at Leven site will not be affected by tax

Drinks giant Diageo has hinted jobs at its Fife packaging plant are safe for the foreseeable future amid fears about the impact new US tariffs will have on the industry.

Concerns have been raised by the company about the effect of the imposition of 25% tariffs by the US on single malt Scotch whisky and liqueurs, particularly at its global supply facility at Banbeath in Leven where Diageo’s single malt brands are bottled.

However, while Diageo – which employs around 1,000 of its 3,000-strong Scottish workforce in Fife – is not too concerned about the move, it fears for independent whisky producers.

A Diageo spokesperson said: “We will be taking measures to mitigate the effect of these tariffs on our Scotch single malts and liqueurs portfolio.

“As a result, we do not expect a material impact to our business. We continue to closely monitor this dispute and would not be immune from a further escalation.”

The US is the biggest export market for Scotch whisky, with sales worth more than £1 billion last year.

Of this, £344 million were single malts that are now to be subject to the 25% tariff, according to the Scotch Whisky Association (SWA).

Karen Betts, SWA chief executive, said the tariffs are likely to reduce US imports of single malts by around a fifth over the first 12 months – similar to the impact on bourbon imports to the EU.

“Consumer choice will diminish and Scotch whisky companies will start to lose market share,” Ms Betts said.

“In Scotland and throughout our UK supply chain, we expect to see a droppingoff in investment and productivity. Ultimately, jobs could be at risk.”

But farmer and distiller Frances Cuthbert, co-founder of Daftmill distillery near Cupar, doubts the new tariff will hurt her business as they are not hugely dependent on the US market.

Being a relatively expensive whisky, it is less price-sensitive.

She said: “We have only recently sent our first batch to the US and I hope it has cleared customs just in time to avoid the new tariff. If they really wanted to hurt the whisky industry they would have included blended whiskies as well as single malts.”

Picture: Kim Cessford. Diageo bottles a number of big brands at its Banbeath plant in Leven.

Scotch Whisky Association chief executive Karen Betts says the tariffs are likely to reduce US imports of single malts by around a fifth over the first 12 months.