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UK: Diageo rubbishes public money claims

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Diageo has poured cold water on suggestions that it acted inappropriately by receiving public money to expand the firm's Scotch whisky facilities.

Diageo has received GBP2.6m (US$4.3m) in public funding in the last decade to expand Scotch whisky facilities.

But, the drinks giant today (13 November) rubbished claims that the funding - from the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) - could be linked to current restructuring plans in Scotland.

The drinks giant said it was awarded a GBP1m RSA grant in 1999 to contribute to its GBP5.2m upgrade of the Johnnie Walker packaging plant in Kilmarnock. In 2001, the group was granted GBP1.9m in public money to help it build a GBP12.5m bottling line at Leven, Fife.

In September this year, Diageo confirmed that it would close its Kilmarnock plant in May 2012, as well as the Port Dundas distillery at Glasgow. Packaging operations will shift to an expanded Leven facility, with a net loss of 500 jobs.

A vociferous campaign against the plans was waged by Scotland's Government and trade unions.

A spokesperson for Diageo said today: "It is deeply regrettable that an attempt has been made to link two totally unrelated projects, which are more than eight years apart, for political ends."

"Diageo is totally comfortable that all obligations placed on the company in relation to these grants have been met," said the group, adding: "In the last five years alone, Diageo has spent or announced capital expenditure of GBP600m in Scotland."

An alternative business proposal on Kilmarnock, put to Diageo earlier this year by the Government and unions, would have required public funding and was rejected by the company as not viable.

In an interview with just-drinks in August, Diageo CEO Paul Walsh said: "If you look at our business in Scotland, we've got three plants. We need two."


Sectors: Spirits

Companies: Diageo, Johnnie Walker

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