Diageo CEO effectively says 'no' to Scottish plant compromise

Diageo chief executive Paul Walsh today effectively ruled out any compromise over the proposed closure of two of the group's bottling plants in Scotland.

Speaking at the announcement of the group's annual results, which saw Diageo's reported operating profits up 13 per cent to £2.6bn, Walsh said he had not had time to go over the alternative proposals to the closures which were submitted yesterday by a task force of unions and local politicians.

However he argued that there could be no shying away from a decision - resulting in up to 900 job losses at plants in Kilmarnock and Glasgow - which he and his senior management team had "agonised over".

"We owe it to the other 4,000 staff we have in Scotland to maintain our competitive edge," Walsh said.

Emerging markets, where sales of Scotch whisky had enormous potential but where economic issues remain, were increasingly competitive, he added.

"We have agonised over this decision for more than 12 months. It not easy to make these kinds of decisions and we have considerable empathy with our colleagues who are affected.

"But the business has to remain competitive and be sustainable. We have spent hundreds of millions on the business and created 400 jobs from our restructuring proposals," he added.

Walsh said it was "frustrating" that Diageo's plan to create these positions had been overlooked in the furore over the closures.

On the question of whether Diageo would accept government money in return for keeping the affected plants open as they stand, Walsh was emphatic.

"We are not after government money. Money should be put into something else which is sustainable in Kilmarnock.

"The proposals as put forward [by the task force] may seek a hybrid solution and we must be careful not to compromise our competitive edge," he said.

The future of the other 4,000 jobs in Scotland had to be considered, he added.

Earlier today a letter calling for Diageo's decision on the closures to be reversed was handed into the group's Central London offices, while Unite, the trade union, is urging golfers playing at this weekend's Johnnie Walker Classic golf tournament at Gleneagles to back its campaign to halt the closures.