Whisky loss leaves bitter taste

The whisky is set to lose its 189-year association with the town under plans to shut the packaging plant in a major re-structuring of Scottish operations that will see 900 job losses – 700 of them in Kilmarnock – in a bid to save about 40 million a year .

The company announced yesterday its historic distillery at Port Dundas, Glasgow, which produced whisky since 1810, would also close.

Scotland is one of Diageo's largest spirit supply centres, currently employing about 4,500 people and producing nearly 50 million cases of Scotch whisky and white spirits.

Last night, Des Browne, Labour MP for Kilmarnock and Loudoun, said the news was "devastating".

"Every bottle of Johnnie Walker has a label which says that this whisky has been bottled in Kilmarnock since 1820," he said.

"The town of Kilmarnock and the people of Ayrshire have contributed to this business's profits for nearly two centuries. I'm told that these are proposals. The company now needs to work with their staff in Kilmarnock and revise these proposals as they did ten years ago to maintain this presence in and these jobs. That's what I'll be working for from today."

Yesterday, Diageo apologised to staff affected by the announcement, but said the move followed an "exhaustive review".

Bryan Donaghey, managing director of Diageo Scotland, said: "These decisions have been extremely difficult to take. We have only reached them after an exhaustive review of all the possible alternatives.

"I am sorry for the impact this announcement will have on our employees and their families in Kilmarnock and Glasgow and the difficulty this will cause in Kilmarnock, where we are a major employer."

The firm hopes to save an extra 40m a year, principally from the changes in Scotland, on top of 120m a year identified around its global operations and expected cost savings from its Irish review.

The jobs will go over the next two years, but Diageo said changes in Scotland will also see 400 jobs created through the expansion of its packaging plant in Fife.

The group's restructuring in Scotland will mark the end of nearly 200 years of distilling at the Port Dundas operation and about 140 jobs will be lost when the distillery and its adjacent Dundashill Cooperage close, although Diageo is hoping to relocate some staff to a new cooperage in central Scotland.

The move to close its Kilmarnock packaging plant and consolidate operations in its other two facilities in Glasgow and Fife will have the biggest impact on jobs, with 700 posts to go by the end of 2011. Diageo hopes to transfer a number of positions to the Fife plant, which is being expanded under an 86m scheme.

Changes at its Shieldhall packaging plant in Glasgow will also lead to 30 job losses, said Diageo, while the group is relocating about 80 office-based staff from Dundas House in Glasgow to a location in central Scotland over the next two years.

A spokesman for the Scotch Whisky Association said: "The Scotch whisky industry is working hard to invest to secure its sustainability and competitiveness, which is so important to the Scottish economy."

The Kilmarnock grocer who created an icon

Johnnie Walker whisky has had a link to Kilmarnock for almost 200 years and is one of Scotland's oldest brands

JOHNNIE Walker is one of Diageo's oldest brands and claims to be the world's top-selling Scotch whisky, with 16.3 million cases sold annually.

Mr Walker founded the whisky business when he launched a grocery store in Kilmarnock and began distilling whisky to sell in the shop. It has since been created and bottled in various sites across Scotland. About 80 per cent of the brand's volume is bottled at Diageo's Shieldhall packaging plant in Glasgow.

The Kilmarnock packaging plant has gone through many transitions since it opened in 1956 and currently produces 11 million cases each year from 17 bottling lines.

The plant was originally set on a seven-acre site and featured seven production lines and just one bottling hall.

In numbers

700 jobs lost at Kilmarnock

140 jobs lost at Port Dundas Distillery and Dundashill

30 jobs lost at Shieldhall packaging plant

400 jobs created at Leven

80 office jobs at Dundas House transferred

40 staff transferred from Carsebridge to Cambus sites

64 warehouse jobs at Hurlford transferred

36 remaining Hurlford jobs relocated

16 jobs in Speyside transferred