Production of some of Scotland’s most famous whisky is under threat as a union confirmed it will move to ballot Diageo workers for strike action over an “insulting” pay offer.
Unite regional industrial officer Bob McGregor said production within the Johnnie Walker maker in Scotland “would come to a standstill” if a strike was called.
Both the Unite union, who have 500 members amongst the 3500 Scottish workforce and GMB which has over 1000 have both held consultative ballots in which 95 per cent rejected the company’s “derisory” 2.5% pay offer following weeks of negotiation.
Staff anger has come at a time when Diageo is expecting to announce more than £4 billion in operating profits in the coming weeks and is ploughing millions into a flagship Johnnie Walker visitor attraction in Princes Street, Edinburgh, as part of a £150 million investment in Scottish Whisky tourism.
The spirits group which produces nearly 40 Scotch whiskies including Johnnie Walker, Bell’s, Black & White, J&B, Singleton, Cardhu, Lagavulin, Oban and Talisker has seen its share price rise by more than 20% since the start of the year on the back of strong gin and whisky sales.
The company, which also makes Smirnoff, Gordon’s and Guinness, said in January that operating profits had risen by 11% to £2.4 billion and came after the drinks giant reported a 3.7% rise in operating profits to £3.7 billion for the year to June 30, 2018.
Bob McGregor, Unite regional industrial officer, said: “This offer is not only insulting, it’s disgusting given the profits made off the backs of hard working Unite members, who deserve a fairer share of the profits they generate for this hugely successful company.
“Diageo appears willing to spend millions creating a whisky shop for Edinburgh’s tourists, while offering the workers who built the Diageo brands we all know and recognise, a paltry 2.5%.”
He added: “Any strike would affect production which would come to a standstill in Scotland.
“The 2.5% was the second offer from Diageo. We have been quite generous in our negotiations, the company haven’t been.
“We have a meeting on Friday, and I hope the company see sense with some positive negotiations and make a reasonable offer to our members. And if they do, we won’t serve notice of a ballot. If it doesn’t we will serve notice and take it forward from there.
“We are certainly right now preparing for that ballot.”
GMB Scotland feels there is now a mandate for a strike ballot but is prepared to wait and see how Friday’s talks pan out.
GMB Scotland organiser Keir Greenaway said: “Our members have rejected Diageo’s offer by a massive majority. It’s a clear message that Diageo needs to do more and no one, least of all the employer, should be surprised. “Next week Diageo will post another bumper set of financial results and operating profits could well pass the £4 billion mark.
“Our members help to play a vital role in this success story and it’s only right they should expect a fair share of the rewards.
“If any employer can deliver a pay offer that beats the cost of living for its employees then it’s Diageo and that’s what we’ll expect when we return to talks this Friday.”
A Diageo spokesman said: “Annual wage negotiations have been taking place with both the GMB and Unite unions in Scotland.
“This [the offer] is made in the context of maintaining a strong reward package and the need for our manufacturing operations to remain competitive.
“Unite have informed us that they now plan to progress to a ballot for industrial action and we remain open to continued talks to secure an acceptable resolution.
“As you would expect we have well developed contingency plans for a number of scenarios.”
Separate negotiations over pay increases have taken place with staff at its sites in England and Ireland.
Diageo, whose heritage in Scotland dates back to 1627 when the Haig family first started distilling is Scotland’s largest exporter of Scotch whisky and other spirits, with around 85% of the company’s production in Scotland exported overseas to over 180 countries.
It has 50 sites in Scotland including 28 malt distilleries and one grain distillery, as well as engineering, technical, warehousing, packaging operations and various management functions.
The row comes three weeks after the Scottish Rugby Union announced a sponsorship deal with Diageo.
It meant that Johnnie Walker is to become the official whisky partner of Scottish Rugby and the official whisky of the Scotland Rugby team in a three-year partnership deal.