Diageo rejects Government 'rescue plan'
Diageo has rejected a Scottish Government-backed plan to delay closure of one of its distilleries and build a new packaging plant to replace one that's closing.
On 3 September the Scottish Government-led Taskforce urged the construction of a new packaging plant on a greenfield site near Kilmarnock to replace one that's closing.
It also suggested that the closure of the Port Dundas grain distillery in Glasgow could be delayed pending a change in market conditions.
In response, David Gosnell, managing director Diageo Global Supply, said: "We examined the alternative proposals thoroughly. They don't deliver a business model that would be good for either Diageo or Scotland.
"We need a sustainable Scottish operation that supports our international spirits business and provides a future for the 4,000 people we would employ in Scotland after this restructuring is completed. I appreciate their efforts but the Taskforce has no workable alternative to deliver what Diageo needs."
Diageo said there were three key reasons for rejecting the Taskforce proposal:
1) There would still be a significant economic gap. This would embed inefficiencies - that Diageo's plan recognises and deals with - and would put at risk further investment across our packaging operations in Scotland.
2) For Port Dundas Distillery no alternative was presented other than delaying action.
3) There would still be an overall loss of around 500 jobs through a reduction in the Kilmarnock workforce and the closure of Port Dundas. There would be no investment at Leven and minimal job creation there.
Gosnell added: "The Taskforce proposal does not address the basic economics of our business, current developments in the marketplace or funding for the suggestions it does advance."
Diageo said it's proposal would mean a net reduction of 500 jobs.
The closure of Kilmarnock and Port Dundas would lead to the loss of up to 900 jobs over the next two years. Around 400 new jobs would be created through the expansion of the Leven packaging plant in Fife. A new coopering centre would be created in Clackmannanshire.
