UK: Government ups pressure on Diageo

Harriet Harman, a cabinet minister in the UK Government, has backed a growing campaign to persuade Diageo to rethink plans to cut more than 10% of its workforce in Scotland.

Diageo's plan to cut 700 jobs by closing its Johnnie Walker whisky packaging plant in Kilmarnock will be a "body blow" to the town, Harman told Parliament in London yesterday (8 July).

She said that the UK Government is "seeking an assurance from Diageo that it will commit to looking seriously at alternative options".

Jim Murphy, secretary of state for Scotland, met with Diageo CEO Paul Walsh yesterday to express the Westminster Government's concerns, said Harman, who yesterday stood in for the absent Gordon Brown at the weekly Prime Minister's Questions in Parliament.

A coalition consisting of trade unions, the Churches, East Ayrshire Council, the Scottish Government and business development agency Scottish Enterprise has united to fight the Diageo proposal, Des Browne, the MP for Kilmarnock, told Parliament. Kilmarnock Football Club has also launched a campaign against the cuts.

An alternative proposal is set to be put to Diageo by Scottish Enterprise and unions, with the backing of the Scottish Government.

One local report earlier this week cited East Ayrshire Council spokesperson Jim Buchannan as saying that Diageo could be offered financial incentives to keep the Kilmarnock plant open.

just-drinks' calls to Buchannan have not been returned.

Diageo announced last week that it would cut 900 jobs from its workforce of 4,500 in Scotland, although it will create 400 new jobs at a new packaging facility in Fife. No compulsory redundancies will be made for 12 months, the firm said.

The move forms part of a group-wide restructuring plan designed to save GBP120m annually from the firm's current financial year, which began on 1 July.