Keeping whisky plant 'would cost £60m'

HOPES of keeping Johnnie Walker jobs in Kilmarnock suffered a new blow last night as a rescue plan conceded it would cost Diageo tens of millions of pounds to reverse its proposals – and that it would still lead to the loss of hundreds of jobs.

The report, commissioned by Scottish Enterprise, is understood to have concluded it would cost the drinks giant some 60 million to stay in Kilmarnock, rather than close the plant and move operations to Leven, in Fife.

Even if it stays in Kilmarnock, the report concludes that, under Diageo's plans, the firm's presence would be smaller, leading to the loss of as many as 350 jobs from the 900-strong workforce.

The report also warns that, by keeping jobs in the Ayrshire town, the firm's plans for 400 new jobs in Leven would have to be significantly reduced or scrapped altogether.

Campaigners insisted it would be worth the cost in order to keep the Johnnie Walker presence in Kilmarnock.

But business chiefs said the findings backed up Diageo's business case.

The drinks giant wants to reduce its Scottish bottling plants from three to two, moving its Kilmarnock operation to a newly expanded plant in Leven. The firm says that will save 20 million a year, guaranteeing its long-term prospects. But the Scottish Government has branded the plans "unacceptable", with campaigners pointing out that Diageo is already making huge profits.

A business case setting out options for retaining Kilmarnock, compiled by the consultant BDO Stoy Hayward, was handed to finance secretary John Swinney, union officials and council chiefs ahead of a key summit in Edinburgh yesterday evening.

Des Browne, the Labour MP for Kilmarnock, said: "It is clear that bottling whisky can continue in Kilmarnock. It will have a cost but that cost is much less than the cost of closure.

"The case for Diageo to change their mind is now able to be made. This report gives (First Minister] Alex Salmond the opportunity he said he wants and the argument to save the jobs."

However, Iain MacMillan, the director of CBI Scotland said: "I haven't seen the report but I would expect it to validate Diageo's business case as the most cost-effective option.

"As regards the other options that involve retaining jobs in Kilmarnock, it is inevitable that would result in fewer jobs in the town, fewer or no jobs going to Fife, and greater costs for Diageo going forward."

Following the summit in Edinburgh last night, Mr Swinney will now prepare his own case to put to Diageo in the next few weeks.