Diageo rejects government-backed proposals for Scottish bottling plant

Drinks giant Diageo looks set to make up to 900 of its Scottish staff redundant after rejecting government-backed proposals to keep two of its bottling plants open.

The group said it had reviewed plans submitted last week by a taskforce of unions and local politicians to keep the plants in Kilmarnock and Glasgow open, but had concluded that they "do not provide a sound basis on which Diageo could build and develop a sustainable business in Scotland, safeguarding 4,000 jobs".

Part of the alternative plan had been to build a new plant in Kilmarnock on a greenfield site; keep the Port Dundas grain distillery open until economic conditions improve, and offer government funds to help support the threatened packaging plants.

The idea of taxpayer's money being used to back the enterprise had previously been rejected outright by Diageo chief executive Paul Walsh.

David Gosnell, managing director Diageo Global Supply, said: "We greatly appreciate the effort by all concerned in the taskforce and the leadership of John Swinney through this very difficult situation.

"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."

Gosnell said Diageo "has never sought public funding for our proposals. We would prefer public money to be directed to the economies of Kilmarnock and Glasgow while we focus our own investment on sites critical to the future sustainability of our operations in Scotland. Regrettably, we must reject these proposals.

"We fully understand the need to address the impact of our proposed restructuring and at the appropriate time we would plan to engage with Scottish Enterprise and other agencies to discuss the regeneration of impacted communities."

Unite, the union backing the taskforce plans, was unavailable for comment.