EU referendum: Diageo chief executive backs Remain in letter to UK employees

Francesca Washtell
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Ivan Menezes released the letter to over 4,000 UK staff this morning (Source: Getty)

The chief executive of Diageo has written to the company's UK staff outlining his arguments for voting to remain in the EU.

Ivan Menezes, who has been at the helm of the British giant behind Bailey's, Guinness and Smirnoff since July 2013, said in the letter sent to all 4,773 British employees this morning that his arguments were clearly a "personal choice", but that he believed that it would be better for the UK, Diageo and the Scotch whisky industry to stay in Europe.

"First, remaining in the EU gives us easy access to the European single market – that’s 500m people on our doorstep to whom we can sell our brands without much red tape," Menezes wrote.

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"Second, remaining in the EU means we benefit from free trade agreements negotiated by the EU with other countries. This allows us to operate on a level playing field with local products and brands from other spirits exporting countries like Australia, Canada and the United States.

"To bring this to life, the EU recently concluded a free trade agreement with Vietnam. Over the next seven years this will eliminate 45 per cent import duty on spirits exported into Vietnam.

"If we leave the EU, our products will revert to paying 45 per cent import duty until the UK is able to negotiate its own trade agreement – this will have an impact. The EU has so far concluded, or is negotiating, over 50 of these global agreements, many of which provide significant commercial benefits for Diageo," he added.

Menezes also said renegotiating the UK's access to European countries and beyond "would be a huge and uncertain undertaking" and that the company would not want new trade restrictions to hamper its freedom of trade across the world.

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The majority of Diageo's British workforce is based in Scotland, where it has more than 25 whisky distilleries. It employees more than 30,000 people worldwide.

Other UK pub and drinks companies have been divided on the referendum. JD Wetherspoon has been a vocal supporter of Brexit - notably distributing Brexit-themed beermats across its 920 pubs - while rival pub chain Fuller's has warned voting to leave the EU would be a "significant risk to the viability of the business".