July 1, 2009 1:19 pm

Diageo to shed 900 jobs in Scotland

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Plans by Diageo to cut up to 900 jobs in Scotland over the next two years have been denounced.

The jobs will go under a restructuring that will see the closure of the drink group’s Port Dundas distillery in Glasgow and a packaging plant at Kilmarnock, Ayrshire. Diageo said the job losses would be offset by the creation of about 400 posts through the £86m expansion of a packaging plant at Leven, Fife.

The group said about 700 jobs would go over the next two years with the closure of the Kilmarnock packaging plant in East Ayrshire.

It said the plant faced “infrastructure limitations” that were not issues at its other packaging plants in Glasgow and Fife.

Bryan Donaghey, managing director of Diageo Scotland, said these decisions had been extremely difficult to make. “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.

“We believe the plans announced today will help secure the sustainability of our business in Scotland.”

But Des Browne, Kilmarnock MP and former Scottish secretary, urged the group to reconsider what he described as a “disastrous” decision, which he said was “devastating” news for the west of Scotland.

“The people of Kilmarnock have helped build
this business since it was founded in 1820,” he said. “Countless millions of pounds of profit have been made from two centuries of their hard work. This is a hugely profitable company and there is no economic case for shutting the plant.”

Willie Coffey, Scottish National party MSP for Kilmarnock, said: “Johnnie Walker has been connected with the town since 1820 and it makes no sense to cut that link.”

The closure of the Port Dundas distillery and the neighbouring Dundashill cooperage will result in the loss of up to 140 jobs.

Diageo said work from Port Dundas could be met through the continued expansion of its Cameronbridge distillery in Fife.

It said the £120m costs of the restructuring would be taken as an exceptional charge in the year to June 2010. Shares in Diageo rose 13½p to 885p.

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