Angus Macleod Scottish Political Editor
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The European President of the global drinks giant Diageo insisted yesterday that the company would not go back on its controversial decision to close a whisky bottling and packaging plant in Scotland.
However, Andrew Morgan also attempted to end growing speculation that the closure of the Johnnie Walker Kilmarnock plant, with the loss of 700 jobs, was the start of a company process to ship an increasing amount of whisky in bulk from Scotland, thus cutting more bottling jobs north of the Border.
In an interview with The Times at the company's Scottish headquarters on the outskirts of Edinburgh, Mr Morgan agreed that there could be advantages for the company in outsourcing bottling nearer to big international markets such as Eastern Europe and the Far East.
He said: “There are incentives for us sometimes to ship bulk out to markets and bottle locally ... there would be taxation benefits that come from that and inducements from governments but we prefer not to to do that.
“We think bottled in Scotland' is an important part of the overall product. We love to bottle Scotch whisky in Scotland and we believe that counts with the consumer.
“Every Johnnie Walker bottle anywhere in the world has been bottled in Scotland and less than 5 per cent of our complete whisky production is bottled outside of Scotland,” said Mr Morgan, who was in Scotland with David Gosnell, the managing director of Diageo Global Supply, to put the company's side of the argument following a torrent of criticism.
Mr Morgan added: “The secret of Johnnie Walker stays in Scotland ... that is not going to go away.”
The decision by Diageo to close the Kilmarnock plant and a grain distillery in Port Dundas, in Glasgow, with the loss of a further 200 jobs, has provoked outrage among trade unions and politicians of all political shades in Scotland. Scottish Enterprise has been drafted in to examine the company's business plan for the closures and come up with alternatives.
Mr Morgan indicated, however, that the decisions on Kilmarnock and Port Dundas had been made and while the company was still “open to alternatives”, it was highly unlikely that the Scottish Enterprise exercise would change anything.
“We take the reaction very, very seriously. It is a big, big decision for us to take ... but it is the right answer for the competitiveness of our Scotch whisky business globally,” he said. “We have three packaging plants in Scotland. We only need two. We have 38 packaging lines and we, frankly, need only around 28.”
That reality, he said, had, however, to be put beside the commitment the company was making to Scotland which amounted to about £500 million in recent years and a further £100 million in the next few years, including £86 million in a new bottling hall at the company's packaging plant in Leven, Fife.
Mr Morgan also appeared to dismiss the compromise option of the company acquiring a greenfield site in Kilmarnock to allow it to expand in the town - an idea that has been floated by Jim Murphy, the Scottish Secretary.
Mr Morgan said that in the company's review of its Scottish operations started in March, several alternatives to closure had been examined. He added: “Clearly, one of the options was a greenfield site but we decided that would not give us the best competitive advantage.”
Meanwhile, it emerged yesterday that Alex Salmond, the First Minister, is to face several written parliamentary questions at Holyrood over his failure to meet Paul Walsh, the chief executive of Diageo, in London last Wednesday, instead choosing to appear on a political chat show on television.
Mr Salmond will now meet Mr Walsh on July 22, when the latter returns from a business trip to China.
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