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Diageo warns it may shift head office overseas

Published:  27 August, 2010

Diageo issued a warning to the UK government that it would not hesitate to move its head office overseas should taxes become "onerous".

Diageo issued a warning to the UK government that it would not hesitate to move its head office overseas should taxes become "onerous".


Chief executive Paul Walsh did not rule out a move abroad in the future, saying the drinks giant would "monitor the situation".


"We occasionally have to remind government that only 7% of our sales are in the UK. If ever our presence is taken for granted or the rate of taxation becomes onerous, we'll look at our options."


"Here today I think we are in good shape, and the noises from the new government have been positive."


Walsh was speaking yesterday as the group's preliminary results showed a 6% increase in operating profit last year to £2.57bn, up from £2.14bn the year before.

It said the increase was off the back of a 5% improvement in sales, which rose from £9.31bn in 2009 to £9.78bn.


On the topic of minumum pricing, Walsh said there was "no empirical evidence to suggest that pricing intervention curbs alcohol abuse".


He added that the firm would work with the government in any targeted approach to curb problem drinking, but that it was against any policy that would penalise responsible drinkers.

Lord Mervyn Davies of Abersoch will be joining the Diageo board from the start of September. Davies, ex-Minister for Trade, Investment and Small Business between until May 2010 will be a non-executive director.

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