DRINKS firm Diageo’s chief executive warned the government yesterday that companies will move out of the UK if the tax regime deteriorates.
Paul Walsh said governments often misunderstand how multi-national companies operate.
“It doesn’t matter where we’re based, and governments can forget that,” said Walsh. “So if they start to think they can be cute on tax, they’ll force us to consider other options.”
Diageo, which makes much of its profit abroad through sales of Scotch whisky, has drawn criticism recently for closing many of its Scottish bottling factories. Walsh had threatened to take the whole company abroad, but said yesterday he has reconsidered since the election.
“The last thing I want to do is re-domicile this company, but in the face of substantial increases in tax I would have to look at it,” he said at the opening of a new whisky distillery in the Scottish Highlands.
The London-based maker of Smirnoff vodka, Johnnie Walker whisky and Guinness beer said last month it remained cautious over growth in Europe and North America. Walsh came under fire after the company revealed he netted £6m in salary and perks last year, despite the gloomy outlook for the firm.