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Diageo Insist Grants And Redundancies Are Not Linked

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Drinks giant Diageo has insisted that the £2.6 million it received in grants to support its operations and the recent decision to axe 700 jobs are not linked.

The Green Party hit out after receiving information about a £1m grant given to Diageo for its Kilmarnock plant, which is now closing with 700 workers losing their jobs.

Diageo was also given £1.6m towards the cost of a new bottling line in Leven, Fife.

But Ken Robertson, a director with Diageo Scotland, has written to Green Party co-leader Patrick Harvie defending the company.

The letter reads: “Diageo completely refutes (sic) the conclusions of your press notice and condemns what we believe has been a complete distortion of the facts for political ends.”

It called on the Greens to “make it clear that there is no link between Diageo’s current proposals for the restructuring of its business in Scotland and RSA grants received by the company over the last ten years”.

The firm says it discharged all its obligations under the terms of the grant.

But Mr Harvie continued to insist that the Diageo grants were an “inappropriate use of public money” in a letter responding to Mr Robertson.

Mr Harvey wrote: “I stand by our press release of Thursday 12th November. I do not expect you to agree with our view on these issues.”

Mr Harvey also wrote that he accepted that the “formal terms” of the grant were adhered to.

But his letter added: “We simply do not accept that seven-figure grants handed to a private business to support employment at two plants in these circumstances are irrelevant to the company’s so-called restructuring programme, a programme which directly affects future employment at those plants.”

Diageo planned closure of its Johnnie Walker bottling plant in Kilmarnock, and its Port Dundas distillery in Glasgow, with 200 redundancies, triggered a political campaign to try to force the drinks giant to reconsider.

The grants were given to Diageo through a Government investment subsidy in which payments are conditional on job targets being reached.

The Greens said the documents showed £1m was awarded in December 1999 towards a £5m expansion that would create 80 jobs and safeguard 405 more.

The money was paid to Diageo in three instalments between April 2002 and May 2004, and the company’s obligations under the terms of the grant expired in May 2007.

Under the same “regional selective assistance” scheme, £1.636m was paid to Diageo in three instalments between November 2002 and February 2005 towards a £12.5m project to install a bottling line in the Leven plant.

The project was to create 71 and safeguard 180 jobs, and Diageo’s obligations under the terms of that grant expired in February this year.

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Friday, October 20, 5:45 pm

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