Blog: Olly WehringDiageo to press ahead in Scotland?

Olly Wehring | 1 September 2009

Last week has helped to put a little more clarity and context around Diageo's decision to reorganise in Scotland.

Scotch whisky has been one of Diageo's drinks categories worst affected by the economic slump, with like-for-like net sales of Johnnie Walker down 6% (volumes fell 11%) and J&B down 12% for the year to the end of June.

At the same time, the drinks giant's pre-tax profits slipped to GBP2bn, from GBP2.1bn a year earlier - although the firm's detractors pointed out that profits of GB2bn does not necessarily dictate that job cuts are necessary.

Then, in an exclusive interview with just-drinks, Diageo CEO Paul Walsh said he expected "eyes will be rolled" at any alternative restructuring plan put to the group. Current alternatives on the table, just-drinks understands, involve the use of public money to prevent Diageo exiting Kilmarnock, but Walsh has said unequivocally that the company does not want handouts.

Despite ratcheting up the pressure, it would be a surprise if the opposition 'Taskforce' persuaded Diageo to back down on this one. More likely, and this is speculation, the plans will go ahead and there will be some kind of Diageo offering to Kilmarnock - a Johnnie Walker museum, for example.


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