by Sarah Hills FoodBizDaily.com staff writer
December 11 2009 - Diageo has reached an agreement with its workforce, represented by the union Unite, which fought to save Scottish sites from closure and protect jobs.
As part of a major cost-cutting and restructuring programme the drinks giant announced earlier this year that it would close its Johnnie Walker bottling plant at Kilmarnock and its Port Dundas distillery.
The restructuring programme is expected to deliver a forecast benefit of a £120 million reduction in costs year on year, but it was met with strong protests and the threat of industrial action in 2010.
Now Unite has announced that the workers have accepted what was described as a “much-improved” offer, ending the union’s campaign.
The union had called for a fairer redundancy deal to compensate the hundreds of workers set to lose their jobs.
Unite said that Diageo has now agreed to increase the termination payments by £4,000 to £9,000 per person, and remove altogether its previous conditions that the payment would be based on productivity and attendance.
Diageo has also opened up the pension scheme to allow part of the packages to be paid in to workers' pension pots, enhancing both the retirement lump sum and the pension.
Jennie Formby, Unite national officer for the food and drinks sector, said they were disappointed not to have saved the plants from closure.
However she said: "The final package is one that provides benefits for members that are second to none.
"Every site had a very clear majority to accept, with Kilmarnock as the largest site showing an 80 per cent acceptance, which is a very clear endorsement of the proposals.
"We have advised Diageo management of the result and also confirmed that our campaign is now formally at an end."
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Diageo plc
Address: 8 Henrietta Place London, ENG W1G 0NB United Kingdom
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About Diageo plc
Diageo plc (Diageo) is engaged in the drinks business with a collection of international brands. Diageo is a participant in the branded beverage alcohol industry and operates on an international scale. Its operations include producing, distilling, brewing, bottling, packaging, distributing, developing and marketing a range of brands in approximately 180 markets worldwide. It markets a range of beverage alcohol brands, including spirits and beer brands. Diageo produces and distributes a collection of branded premium spirits, beer and wine. It produces and distributes a range of premium brands, including Smirnoff vodka, Johnnie Walker Scotch whiskies, Captain Morgan rum, Baileys Original Irish Cream liqueur, JeB scotch whisky, Tanqueray gin and Guinness stout. In addition it also has the distribution rights for the Jose Cuervo tequila brands in the United States and other countries. Diageo’s beer brands include the global stout brand, Guinness.