Trouble Is Brewing for Guinness After Brexit
Brewed at St. James’s Gate near the River Liffey in Dublin since the mid 18th century, what’s in almost every bottle and can of the stout crosses the border from Ireland to the U.K. twice before reaching beer drinkers.
Ingredients from all over Ireland arrive in Dublin, where the water, barley, hops and yeast are mixed and brewed. The beer is then pumped into tanker trucks known as silver bullets and carried 90 miles north to Belfast in the U.K. province of Northern Ireland. There, it’s bottled and canned before being sent back south for distribution.
“For me, there’s no question, there has to be some sort of customs visibility on either side of the border,” said Robert Murphy, a former customs official at the Irish tax authority who later worked at the European Commission in Brussels. “The idea of having a seamless and friction-less border is lovely, but I do wonder how realistic it is.”
Border controls began to melt away in the 1990s as the U.K. and Irish governments, backed by the EU, fostered a peace agreement between the mainly Catholic nationalists fighting for a united Ireland and the largely Protestant loyalists defending the status quo.
Shoppers are now free to filter back and forth using their Irish euros or British pounds. Cross-border trade is worth more than 3 billion euros ($3.2 billion) a year, the Irish government estimates.
For London-based Diageo Plc, the owner of Guinness, it means the company’s trucks can head north and south unencumbered.
The company has said it will work with the British and Irish governments on finding a solution to the border issue.
Brexit could cut trade flows between Ireland and the U.K. by as much as a fifth, the Economic & Social Research Institute estimated. In draft guidelines for negotiating the U.K.’s exit, EU President Donald Tusk said “flexible and imaginative solutions” will be needed to avoid a hard border.
“For big companies like Diageo and brands like Guinness, there might be solutions, whether that be electronic tagging or some sort of trusted trader program,” said Murphy. “Customs officers don’t want to waste people’s time. But it’s not going to be easy.”