Comment - Diageo dashes taskforce hopes
Diageo has fought a successful public relations rearguard action to shut the door on alternatives to its proposed job cuts in Scotland.
As many who have followed the issue suspected all along, Diageo will not be reversing its decision to close the Johnnie Walker packaging plant in Kilmarnock and Port Dundas in Glasgow.
The rescue plan, always more hopeful than realistic, has been sunk a week after being floated by the Scottish Government.
Scottish finance secretary John Swinney said today that the opposition taskforce will meet to "consider our next steps". Even Swinney had to admit that this is likely to involve "mitigating the serious impacts" of job losses in Kilmarnock, rather than preventing them.
This has been as much a duel in public relations as in theories on the evolution of the Scotch whisky market.
Ministers, kept in the dark about the plans until the last minute, had to do something - even if only to save face. For a time, with thousands marching in the streets and tough words from the Government, it looked as if Diageo might just have brewed up a storm too powerful for it to overcome.
Annual profits of GBP2bn for the company, rising Scotch whisky exports and repeated claims that the drinks industry has proved "resilient" to recession were ready-made ammunition for the opposition.
However, once it became clear that even the best alternative plans for Diageo involved some job losses and required public money to be realised, the company regained the initiative.
Diageo pressed home its advantage during its full-year results last week. It drew attention to falling sales for Johnnie Walker in the downturn, while straight-talking CEO Paul Walsh delivered the stark reality: "We've got three plants. We need two."
The restructuring is now likely to go ahead largely as announced, although Diageo has yet to finish a consultation with employees and negotiations with trade unions could prove lengthy. There may be skirmishes and concessions along the way, but Diageo appears to have won the war.
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