Page last updated at 14:46 GMT, Saturday, 22 August 2009 15:46 UK

Council rejects report on Diageo

Campaigners
There has been a vociferous campaign against Diageo's closure plans

Council leaders disappointed by an independent consultants' report into Diageo's plans in Scotland are vowing to fight on for 700 jobs in Kilmarnock.

The analysis by BDO Stoy Hayward has "discrepancies and serious omissions", according to East Ayrshire Council.

The study apparently says it could cost Diageo millions to stay in Kilmarnock, rather than close the plant and open a new one in Leven, Fife.

A report detailing alternatives to closure is to be presented to Diageo.

Campaigners say closing the Kilmarnock plant will devastate the local economy, and also that because Johnnie Walker has been bottled in the town since 1820 it will have a negative impact on sales.

'Badly flawed'

The BDO report was commissioned by Scottish Enterprise at a cost of £75,000 - it has not been made public because of commercially sensitive information contained within it, but it is believed it said the rationale behind the drinks conglomerate's plans appeared "sensible".

Scottish Enterprise, the government's enterprise agency, is co-ordinating efforts to draw up a plan for an alternative to closure and a taskforce has been studying the consultants' report.

Protest poster
The company is due to announce its results later in the week

The report, which evaluated Diageo's original plans, also considered a number of alternatives.

But campaigners said it failed to recognise the potential of the Barleith plant in Hurlford.

East Ayrshire Council is now working to produce its own report to be presented to Finance Secretary John Swinney on Tuesday - ahead of Diageo publishing its latest financial results on Thursday.

Councillor Jim Buchanan told BBC Scotland: "The report was badly flawed, there was no question of that."

He said: "The first one being that consumers were not aware of the local connection with Kilmarnock and Johnnie Walker. When questioned about this, BDO couldn't answer this and quite clearly it's an absolute nonsense.

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"The second point was that in one of the alternatives put forward they said there would be an on-cost of £72m to Diageo. Again when questioned this figure dropped from £72m to £49m. A £23m loss in just a matter of seconds."

The council has called this a "new action phase" of the campaign in advertisements taken out in The Herald and The Scotsman newspapers on Saturday.

The advert attacks the study, saying: "Disappointingly there are a number of discrepancies and serious omissions in the report and on more than one occasion the consultants were unable to answer our questions.

"When pressed, the consultants admitted that across a number of key issues, they were simply expressing their own views, including their statement that location will not affect whisky sales."

A BDO Stoy Hayward spokesman said criticism of the report was a matter for Scottish Enterprise.



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