July 27/Business Monitor International Ltd. (BMI) -- Drinks giant Diageo has announced plans to cut more than 10% of its workforce in Scotland as part of a restructuring programme designed to 'ensure the long-term sustainability of its operations in Scotland in the current economic conditions. The plans include the closure of a packaging plant in Ayrshire with the loss of 700 jobs and the closure of a distillery and cooperage in Glasgow resulting in the loss of 140 jobs. To offset the reduced capacity a packaging plant in Leven will be expanded, which the firm has suggested could create up to 400 jobs.
Scotch whiskey was one of the fastest-growing spirits sectors globally prior to the onset of the economic downturn. This growth was driven by soaring demand in emerging markets, including China, India and Russia, where Scotch's strong European heritage makes it popular among the newly affluent middle classes. This was accompanied by continued growth in core markets, such as the U.S., with the increased marketing and recognition of major brands a key factor behind this rise in demand. However, this growth was curtailed by the economic downturn, and in 2008, volume sales fell by 5%. Over the year, value sales continued to climb, but this can be almost entirely attributed to the rapid decline in the value of sterling.