Diageo in union row over 'Brexit' job losses in Scotland

Diageo (LSE: DGE.L - news) , the FTSE 100 drinks giant, has rounded on union claims that it is shifting Scottish vodka production to Italy and the US because of Brexit.

The GMB union warned 105 roles were to be lost between Diageo's Leven plant in Fife and its Shieldhall operation near Glasgow as a result of the decision - affecting Smirnoff and Ciroc manufacturing.

The union's Scotland organiser, Louise Gilmour, described it as a "gross betrayal" of the workforce, telling Sky News that GMB members believed "it was just the start" of a shift away from white spirit production in the country.

She (Munich: SOQ.MU - news) said "Over 100 skilled workers are now facing unemployment because Diageo are hedging their bets over Brexit - there is absolutely no getting away from this.

"We warned (Scottish Secretary) David Mundell and the UK government about the possible impact of Brexit on the future of jobs across our drinks manufacturing sector.

"And about the need for protective measures to safeguard an industry worth billions to the Scottish and UK economies."

The company told Sky News that while the UK's vote to leave the EU was a factor in its decision, it said the move reflected much wider "global volatility" in its markets.

Its statement said: "Following the disposal of our wine business and the subsequent end of the wine bottling contracts, we have reviewed our spirits bottling footprint to ensure we not only deliver leading performance for both our domestic and export supply chains around the world, but also to strengthen our business for the future.

"Regrettably, these changes may impact some roles in our European bottling plants towards the end of the year and we will now enter a period of consultation with our employees and their representatives to discuss the proposals in more detail.

"We are committed to our three spirits bottling sites in Europe - two in Scotland and one in Italy.

"The outcomes of this review will ensure we have the flexibility to respond to increased competition and external volatility, alongside testing and building the capability we need across our global supply chain to grow our brands."

Diageo employs 4,000 people across Scotland.

The company said there were no further reviews of its operations there currently taking place.

The sniff of a Brexit link, as campaigning for the General Election gathered momentum, was seized on by the Conservatives' opponents.

SNP MSP Jenny Gilruth, who represents Leven, said: "The suggestion by the GMB union that it had warned David Mundell over the need to take action to protect Scotland's drinks manufacturers against Brexit long before this announcement is yet another sign that he is happy to support the Tories' Brexit plans no matter the damage they will inflict on our communities and economy."

Scottish Liberal Democrat leader, Willie Rennie, said: "This is the cold sober reality of a hard Conservative Brexit."

A UK Government spokesman said: "We have been in contact with Diageo and understand the company has begun a consultation with staff about proposed operational changes that are not driven by the UK's decision to leave the EU.

"The UK Government continues to support the Scottish economy and key sectors such as the drinks industry."