Diageo faces a £106m South Korean tax bill

Drinks giant Diageo has been told to pay 206.4 billion won (£105.9 million) in unpaid tax in South Korea.

It under reported the value of imported liquor, said a customs official. Diageo, which can appeal the order, said the notification was only a "preliminary audit assessment notice".

Diageo's Johnnie Walker is the most popular whisky in Asia and has the biggest share of the Korean market.

Diageo had a licence cancelled in 2007 for using unlicensed wholesalers. It obtained a new licence last year. The authorities say the tax claim relates to scotch imported from 2004 to 2007.

"We are robustly defending the current position, which has been in place since 2004 and had previously been accepted by the Seoul Customs Office," Richard Burn, a Diageo spokesman said.

"Diageo Korea has fully co-operated with the audit and provided detailed explanations of the valuation methodologies followed, together with a fully comprehensive documentation."