Supporting Hospitality Through Headwinds

At Diageo we are proud to be a globally successful British business. We produce more than 200 brands (including iconic names like Johnnie Walker, Tanqueray and Guinness) and sold in more than 180 countries around the world. We are the UK’s largest food and drink exporter, accounting for more than 10 % of the UK’s food & drink exports.

We have our global headquarters in London, our largest manufacturing operations in Scotland, and we employ over 4,500 people across our 60+ UK sites and 30 single-malt distilleries, while supporting more than 45,000 jobs across the UK in hospitality, tourism, agriculture and more.

At Diageo, we believe that our role in this industry is not just to produce and distribute great drinks, but to support the environments in which they are enjoyed responsibly, and in that sense, our partnership with Plunkett UK is a natural one.

Plunkett UK’s mission is compelling: they support people across the UK to set up and run community-owned businesses such as village shops and pubs, and to turn income into impact. There are currently over 860 community-owned businesses trading and nearly 800 more in the pipeline.

Their work focuses on five key themes: safeguarding access to goods and services in rural areas, boosting local economies, creating employment and volunteering opportunities, tackling climate change, and promoting equity, diversity and inclusion.

In many ways those themes sit entirely alongside our own agenda at Diageo. Our Spirit of Progress commits us globally to three priorities: promote positive drinking, champion inclusion and diversity, and pioneer grain to glass sustainability.

But we also know that none of those ambitions can be fulfilled unless the hospitality sector itself is resilient and open for business.

Community-owned hospitality businesses provide ideal training opportunities for young people

The UK pub and hospitality sector continues to face acute pressure: cost inflation, energy bills, labour shortages, changing consumer behaviour, and the residual effects of the pandemic.

Recent data shows that the rate of pub closures is accelerating.

According to the British Beer and Pub Association, nearly 300 pubs closed across England and Wales last year, averaging about six each week and resulting in over 4,000 job losses.

And this is especially true in rural communities, where pubs are often the last remaining social hub, the place that sustains local community.

For us in the spirits business in the UK we have seen sharp increases in excise duty. While there were also helpful measures (such as draught relief for on-trade beer and cider) those don’t fully address the burden on hospitality.

When spirits duty is up to 66% higher per unit of alcohol than beer duty, or up to 260% higher than cider duty, there is a distortion in how we support on-trade venues. We know spirits account for one third of all drinks consumed in hospitality and are a major revenue driver. That’s meaningful and the tax burden is hurting the hospitality ecosystem we all rely on.

Diageo values the work of Plunkett UK. Its deep roots in rural and community business, a strong policy voice, and its practical support for people who make a place work.

We are optimistic about the future of hospitality in the UK because we know the foundation is strong: committed people, resilient communities, iconic brands, and a love for pubs and shared experiences that remains unshaken.

If we work together, we can ensure that not only do our venues survive, but that they thrive, become more inclusive, more diversified, more connected to their communities and more sustainable for the long term.

Elisabeth Rochford leads Diageo’s responsible business work in the UK