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Brewery giant worried over potential hangover from trade restrictions

The Japanese owner of Peroni has warned that Brexit could leave the company nursing a severe hangover, with the beer giant's UK boss describing potential restrictions on trade as "evolution in reverse".

Gary Haigh, the managing director of Asahi UK, told the Press Association that it would be a "nightmare" if tariffs were reintroduced and automated EU systems for monitoring trade were replaced with pen and paper after Britain exits the single market.

"One thing the EU has done is reduce the amount of administration required. There's been a concerted effort to make the movement of goods around Europe easier.

"The EU's EMCS (Excise Movement and Control System) is a completely electronic system which governs the movement of all alcohol within Europe. It's paperless, the EU invested a lot of money into it and it works like a dream.

"If we lose the EMCS system, it's going to involve a lot more administration, more people, more pens, more opportunity for error. If we also end up with duty tariffs, it's going to be a nightmare," he said.

Mr Haigh added that jettisoning the system would take the industry "back to 25 years ago", and that it was akin to "putting evolution in reverse".

Asahi UK - which also owns the Grolsch and Meantime brands - imports alcohol from Italy, Holland, Czech Republic and Poland.

The Japanese government and business lobby have been vocal about their dislike of Theresa May's decision to pull Britain out of the single market, warning that companies from the Asian nation could start exiting the UK if it ceased to be a "gateway to Europe".

Higher overheads from Britain potentially ditching the ECMS would come on top of the collapse in the value of the pound since the Brexit vote, which has also resulted in sharp increases in costs for UK firms.

However, Mr Haigh said that Asahi would swallow any extra costs rather than pass them on to customers, insisting that the firm will price Peroni at a level that "reflects the brand's equity".

"We have not passed the impact on to customers, we've taken it upon ourselves to mitigate the impact.

"We will price Peroni in a way that reflects the brand's equity, we've never tied our pricing to raw materials or anything else," he said.

Asahi acquired Peroni, along with Grolsch and Meantime, from AB InBev last year for around 2.5 billion euro (£2.1 billion).

AB InBev sold the brands in order to allay competition concerns linked to its megamerger with SAB Miller.

The Japanese firm's motivation for the acquisition was to break out of its domestic market, where less beer is being drunk, Mr Haigh said.

Before the deal, overseas revenues for Asahi accounted for about 10% of its total - the acquisition takes that up to about 28%.

"What they're buying into is expanding the brand into other markets where we don't have a brewing footprint - Scandinavia, France, Spain, Latin America.

"Peroni might already be there, but Asahi wants to turn it into a premium brand, like it is in the UK."

In Britain, Mr Haigh said the launch of a gluten free Peroni and a smaller sized bottle are doing "tremendously well", particularly among female consumers as the firm tries to shift the image of beer drinking being about "lads watching sport".

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