Page last updated at 11:33 GMT, Thursday, 10 September 2009 12:33 UK

Diageo 'creating jobs blackspot'

Johnnie Walker protest
Diageo is to close its Kilmarnock plant with the loss of up to 700 jobs

Kilmarnock will become an unemployment blackspot if Diageo goes ahead with plans to close its bottling plant in the town, it has been claimed.

East Ayrshire Council said the drinks giant's decision to ignore a rescue deal would devastate the area.

The warning came as Finance Secretary John Swinney said the government-backed plans were a "credible alternative".

Diageo plans to close its Kilmarnock plant and distillery in Glasgow with the loss of up to 900 jobs.

The firm announced plans in July to cut 700 jobs by closing its Johnnie Walker bottling plant in Ayrshire and a further 200 with the closure of its Port Dundas distillery in Glasgow.

It said the job losses would be partially offset by the creation of 400 new jobs in Fife.

A government-led taskforce, which included councils, politicians and trades unions, submitted a proposed rescue plan to Diageo last week.

But on Wednesday the firm said the proposals were not commercially viable and it now considered its dialogue on the issue to be "closed".

when you come to a proposal with a financial gap of let's say £3 to £4m, and a company is making profits of £2bn, I don't think it's an unreasonable proposition to say to the company you have a corporate social responsibility to protect communities
John Swinney MSP
Scottish Finance Secretary

Speaking on BBC Radio Scotland's Good Morning Scotland programme, East Ayrshire Council leader, Douglas Reid, said the consequences for the area would be dire.

"We're faced with severe high unemployment. East Ayrshire will have the highest unemployment benefit projections in Scotland.

"John Swinney has recognised this and he's told us he's going to take all factors into account to mitigate the social impact that's going to have in Kilmarnock."

The authority's chief executive Fiona Lees, told the programme that Diageo owed "a debt of gratitude" to Kilmarnock and should contribute towards its regeneration.

"We're looking at public money being available to help grow jobs and bring jobs and we want that matched pound-for-pound by Diageo," she said.

'Polluters pay'

Ms Lees said the company could not walk away from its responsibilities to help clean up the site it planned to vacate.

"We have, potentially, a seriously contaminated site. We estimate the cost of making that site clean and safe will be around £19m," she said.

"We would always say that polluters should pay and we think that they've got certain legal obligations and the council will be seeking to ensure that all available enforcement action is indeed taken."

Meanwhile, Mr Swinney has criticised Diageo for declining what was a "strong and credible, workable alternative" to its closure plans.

Speaking on Good Morning Scotland, Mr Swinney questioned the drinks firm's claim that the rescue package was not viable.

"There's two points of basic economics at stake in this," he said.

"The first point is the fact that the Kilmarnock economy will be devastated and the Scottish Government and the UK Government will have to pick up the pieces, at a cost we estimate at £14m a year.

"The second point of basic economics is that when you come to a proposal with a financial gap of let's say £3 to £4m, and a company is making profits of £2bn, I don't think it's an unreasonable proposition to say to the company you have a corporate social responsibility to protect communities that have served you well."



Print Sponsor


SEE ALSO
Johnnie Walker jobs plan rejected
09 Sep 09 |  Glasgow, Lanarkshire and West
Diageo cuts may cost town 15.5m
02 Sep 09 |  Glasgow, Lanarkshire and West
Profits dip at protest-hit Diageo
27 Aug 09 |  Business
Protests 'could hit Diageo sales'
27 Aug 09 |  Glasgow, Lanarkshire and West
Council rejects report on Diageo
22 Aug 09 |  Glasgow, Lanarkshire and West
Diageo defends 900 job cut plan
09 Jul 09 |  Glasgow, Lanarkshire and West

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC iD

Sign in

BBC navigation

Copyright © 2019 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific