Strike action may hit Diageo ‘imminently’

Diageo could be hit by strikes across the UK in the run up to Christmas after union members voted in favour of industrial action over proposed pension cuts.

Diageo will try to ensure its business “continues as usual” following the threat of strike action

Yesterday (21 November), 63% of Diageo workers who are members of trade union GMB Scotland voted in favour of strike action, while 69.7% voted in favour of “action short of strikes”.

Employees who voted for industrial action work across Diageo’s Scotland operations, including its Leven and Shieldhall bottling plants and a number of distilleries.

GMB Scotland launched a two-week ballot for 1,500 of its members after changes to Diageo’s final salary pension scheme were announced, accusing the Johnnie Walker Scotch and Smirnoff vodka maker of “shameful corporate greed”.

Meanwhile, at fellow trade union Unite, 77% of members voted in favour of strike action and 82% voted in favour of industrial action.

Diageo has been consulting with employees and their unions since February this year as part of a review of its pension scheme, starting formal consultations on proposed changes in July.

The group made a decision to end its final salary pension scheme, which it claimed was an escalating cost for a small part of the overall workforce whose life expectancy was collectively increasing.

The scheme closed to new members on 22 September 2005, but about 1,700 employees are currently covered by the plan. As such, up to one third of Diageo’s workforce would be affected by the changes.

However, GMB Scotland said Diageo plans to move workers to a new scheme with “inferior terms”, while new employees “will be placed on an inferior scheme all together”.

“Our members have sent a strong message to Diageo that the company needs to think again if it wants to avoid damaging strikes across Scotland,” said GMB Scotland organiser Louise Gilmour

“Diageo is happy to significantly increase executive pay in the wake of billions of pounds of profit but they won’t protect the pensions of the workforce who have contributed massively towards the success of the business.

“It’s another example of the obscene disparity between executive pay and the ordinary worker and if there is one company that can most certainly afford to sustain decent pension arrangements for its workers then it’s Diageo.

“It’s a question of fairness and Diageo can clearly go further to protect the pensions of their workers.”

Pat McIlvogue, regional officer for Unite, also said: “This is corporate avarice on a scale that even Charles Dickens couldn’t imagine. But this isn’t the Victorian era, and our members will stand together in the face of this corporate greed. We will support them to make sure they get fairness and their promised pension rewards.”

Diageo responded by claiming the ballots by GMB Scotland and Unite were “premature” since discussions are “ongoing”.

“The company and employees are in a consultative process and have not yet moved into consultation on the alternative proposal,” a spokesperson for Diageo said. “It is also far from the positive industrial relations of past decades that the company has had with its employees and which has helped build the reputation our supply business has today.

“If and when strike action is taken the company will focus on ensuring that our business continues as usual as far as possible. Strong plans are in place for this while we seek to move back into dialogue on the DPS [Diageo Pension Scheme].

“Management at Diageo remain committed to finding a sustainable solution on pensions that helps to manage the long-term needs of employees in a competitive pension with the growing risk and cost to the company of the DPS scheme.”

Diageo will now seek to restart negotiations with GMB Scotland and Unite.