The global spirits giant is restructuring in Scotland but it appears that Brandhouse, its South African subsidiary, has nothing to worry about.

Global drinks giant Diageo, one of three parent companies of Brandhouse, which imports, markets and distributes Bell’s, Johnnie Walker, J&B, Smirnoff and other spirit brands in South Africa, has announced it is to cut up to 500 jobs in Scotland.



It is unlikely that the cuts in Scotland will have any effect on operations in South Africa, where Brandhouse’s spirit brands continue to thrive in spite of the recession.



The jobs in Scotland will be lost in a restructuring that will close the Port Dundas distillery in Glasgow and a packaging plant in Kilmarnock.



Diageo, which has its headquarters in Edinburgh, said the closures and job losses would take place over the next two years and would be offset by the creation of about 400 new jobs through the expansion of a packaging plant at Leven in Fife.



The firm said about 700 jobs would go over the next two years with the closure of the Kilmarnock packaging plant. The plant faces "infrastructure limitations" which were not issues at its other packaging plants at Shieldhall in Glasgow and Leven in Fife.



The closure of the Port Dundas distillery in Glasgow and the neighbouring Dundashill cooperage will result in the loss of up to 140 jobs.



Although it is taking on work for the closure-threatened Kilmarnock packaging plant, Diageo said a £3m investment in the site and changes in working practices would allow for a reduced workforce.



The firm stressed that the net job losses would be about 500 posts in Scotland as the headline figure would be offset by jobs created elsewhere.



It aims to create up to 400 new jobs at the Leven packaging plant in Fife, where an £86m investment will see the construction of a new packaging hall to open in 2011. Diageo said it hoped some of these jobs would be taken by employees transferring from Kilmarnock.



The restructuring will see about 80 office staff in Glasgow transfer to another location in central Scotland over the next two years.



Elsewhere, the company is planning a new £9m cooperage to be built at its existing Cambus site near Alloa by the middle of 2011. This will result in the closure of Diageo's nearby Carsebridge cooperage. The company envisages relocating 40 staff from Carsebridge to Cambus.



Diageo also plans to contract out operations currently undertaken at the Hurlford consolidation warehouse in Ayrshire and leave the site next year.



Bryan Donaghey, MD of Diageo Scotland, said: "These decisions have been extremely difficult to take. We have only reached them after an exhaustive review of all the possible alternatives. I am sorry for the impact this announcement will have on our employees and their families in Kilmarnock and Glasgow and the difficulty this will cause in Kilmarnock, where we are a major employer.



"We believe the plans announced today will help secure the sustainability of our business in Scotland. We will do everything we can to support our employees through this difficult time.”



Last month Diageo said that markets around the world had weakened. It reported that sales were down 7% in the three months to the end of March.



Brandhouse, which employs about 900 people in South Africa, says that its brands have increased their share of the South African market in recent years.