Until a few years ago Kearny, New Jersey, was known as Little Paisley. In its heyday 21,000 Scottish immigrants lived in the small town outside New York.

Today its population is more cosmopolitan and all that remains of its Caledonian heritage is the Scottish market, a couple of fish and chip shops, and the Scots American athletic club. Founded in 1932, the club continues to attract Scots diehards who like to relax with one of the many Scotch whiskies on sale in the newly renovated St Andrews lounge.

Joseph Doleman, its 52-year-old bartender, was on shift on Friday when much of the talk among the regulars was of the decision by Diageo, the whisky giant and maker of Johnnie Walker, to close its bottling plant in Kilmarnock with the loss of 700 jobs, ending a 189-year-old association between the brand and the town. It is one of the club’s biggest sellers, and the announcement was met with anger.

“I will never serve Johnnie Walker on my shift again,” said Doleman, whose ancestors moved to America from Glasgow. “I feel for the people of Kilmarnock. It really is a great shame. It will, without a doubt, change the way the guys here see Johnnie Walker. I know at least five people here who won’t drink it any more and they used to drink it every day. If bottling was to be moved out of Scotland completely, I would not consider it a Scotch any more — it would be a disgrace.”

It is now 12 days since Diageo, which also makes Guinness and Tanqueray gin, announced a restructuring plan that, it hopes, will save the company £40m a year, and the political row it has generated shows little sign of abating. As well as closing the Kilmarnock plant, the firm also plans to shut its Port Dundas distillery in Glasgow, with the loss of 140 jobs, with a further 30 jobs going at the Shieldhall packaging plant in the city. About 400 jobs will be created at a consolidated packaging facility in Fife.

Among the politicians who have taken a keen interest in developments are Alex Salmond, the first minister, Jim Murphy, the Scottish secretary, and Des Browne, the former defence secretary, whose constituency includes the Kilmarnock plant.

At stake is more than the fate of almost 900 jobs, troubling though their loss is to the people affected and to the economy. The wider issue is the credibility of the Scotch whisky industry, for if the principle is conceded that Scotch can be bottled and packaged anywhere, without it impacting on its provenance and reputation, it opens up a host of possibilities.

If there is no practical or business reason for Johnnie Walker Red Label to be bottled in Kilmarnock, runs the argument, then it follows there is no reason why Scotch whisky should not be bottled abroad.

In an interview with The Sunday Times Brian Donaghey, the managing director of Diageo Scotland, insisted the company was committed to keeping jobs here, but he said it did not follow that bottling could not be done in another country.

“Scotch has to be distilled and matured in Scotland, but it doesn’t have to be bottled in Scotland,” he said, adding that 85% of the company’s Scottish-produced goods were exported and that there were “various pressures” to export in bulk, and bottle and package somewhere more local to the ultimate market.

His comments have implications for an industry that is showing signs of strain, with global sales expected to fall by 5% this year. It continues to be a lucrative source of jobs and income, employing 10,000 people and providing £2 billion a year to the UK balance of trade, but no industry is immune to the global downturn. What remains unanswered is whether the move by Diageo is a one-off by a firm intent on rationalising its operation or the first signs of a restructuring of an industry that could ultimately see many of its operations moved abroad?

Not all whisky drinkers have such an emotional attachment to the town where their favourite tipple is bottled. Customers at the Hazelburn bar in Tokyo have more than 400 varieties of Scotch to choose from, but the one they are all familiar with is Johnnie Walker Red Label, according to Kazuya Koyama, the manager.

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