UK NEWS

£2BILLION PROFIT BUT DIAGEO SET TO AXE 900 JOBS

DIAGEO: Drinks giant

Thursday July 2,2009

By Rod Mills

SCOTTISH workers were hit with another devastating blow yesterday as drinks giant Diageo announced it will axe 900 jobs.

The move will see the closure of its historic distillery at Port Dundas in Glasgow, which has been producing whisky since 1810.

Diageo will also close a packaging plant at Kilmarnock in Ayrshire and transfer some of its warehousing operations.

The Edinburgh-based drinks group, which is behind brands including Guinness stout, Smirnoff vodka and Johnnie Walker whisky, will cut 700 jobs at the packing plant, which will close in 2011.

Around 140 jobs will be lost when the Port Dundas distillery and its adjacent cooperage close, with 30 jobs going at the Shieldhall packaging plant in the city.

Last night Diageo came under fire over the restructuring move. It is expected to save £100million over the coming year, despite the group reporting £2billion operating profits last year.

Kilmarnock and Loudoun SNP MSP Willie Coffey criticised the company’s decision to sever its historic links with Kilmarnock despite its “handsome profits”.

Scandalous ‘It’s like the corporate world has gone mad’

He said: “It’s like the corporate world gone mad. It will be a hammer blow to Kilmarnock if they go through with this. Johnnie Walker has been connected with the town since 1820 and to abandon that link is scandalous. Focusing solely on the balance sheet is not what built Johnnie Walker into a world-leading brand.”

Scotland is one of Diageo’s largest spirit supply centres, currently employing around 4,500 people and producing nearly 50 million cases of Scotch whisky and white spirits. Diageo said it was hoping to relocate some staff to a new cooperage in central Scotland, and will transfer 80 office staff from Glasgow to another location in central Scotland and 80 haulage jobs to Fife.

Bryan Donaghey, managing director of Diageo Scotland, said: “I am sorry for the impact this announcement will have on our employees and their families in Kilmarnock and Glasgow and the difficulty this will cause in Kilmarnock, where we are a major employer.”

First Minister Alex Salmond will meet Diageo executives today. Prime Minister Gordon Brown also pledged his Government stood “ready to help” those facing the dole queue.

OPINION: PAGE 12

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