Page last updated at 21:02 GMT, Tuesday, 25 August 2009 22:02 UK

Diageo jobs rescue plans agreed

Protest poster
Diageo plans to close its Kilmarnock plant with the loss of 700 jobs

An alternative business plan to save the Diageo plant in Kilmarnock from closure has been agreed, the Scottish Government has said.

Finance Secretary John Swinney said the plan, which will be put to the drinks company, would continue production in the town by setting up a new plant.

The broad proposal was agreed by a multi-agency taskforce set up to reverse Diageo's proposed cuts.

It would also see production continue at Glasgow's Port Dundas distillery.

Diageo announced last month that it planned to close both facilities with the loss of up to 900 jobs.

We are ready to put the plan to Diageo and will do that swiftly
John Swinney
Scottish finance secretary

The majority of the job losses - 700 - would come with the closure of the Johnnie Walker bottling plant in Kilmarnock.

Diageo said these would be off-set by the creation of up to 400 new posts in Fife.

Following a meeting of the taskforce, comprising unions, local politicians, councils and economic development agency Scottish Enterprise, Mr Swinney said: "We have formulated a proposal to put to Diageo which will focus on continuing production activity at Port Dundas in Glasgow and the development of a new bottling plant in Kilmarnock on a greenfield site.

"We are ready to put the plan to Diageo and will do that swiftly. We look forward to discussions with the company on the details of our proposals. They have pledged to engage with us on our proposals and that is exactly hat we expect them to do."

The plan came in a wake of an independent report which is believed to have backed some of Diageo's business case.

The BDO Stoy Hayward report, commissioned by Scottish Enterprise at a cost of £75,000, has not been made public, however it is understood to have concluded the rationale behind the drinks conglomerate's plans appeared "sensible".

East Ayrshire Council took out advertisements in The Herald and The Scotsman newspapers on Saturday which attacked the findings of the study.

The adverts stated: "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."

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