Diageo Unite workers ‘betrayed’ over share withdrawal

6th August, 2020 by Nicola Carruthers

Trade union Unite Scotland has hit out at Diageo’s move to withhold shares from its workers following the release of the company’s fiscal 2020 results.

The Johnnie Walker experience in Edinburgh is due to open next year

Through Diageo’s Free Shares scheme, employees based in the UK are offered shares annually. The number of shares awarded is based on a percentage of the workers’ salary as of 30 June. This percentage is dependent on Diageo’s profits, which are announced during the group’s full-year results. Free shares are usually awarded to eligible Diageo employees in September each year at no cost.

Unite Scotland said Diageo has taken the “unprecedented decision” to withhold shares from its employees following the publication of the group’s fiscal 2020 results.

‘Utterly betrayed’ 

Elaine Dougall, Unite regional coordinating officer, said: “Unite’s members at Diageo feel utterly betrayed by the company in light of their efforts to keep the business operating during the Covid-19 pandemic.

“We recognise that like all company profits there has been a significant drop but other companies in the drinks industry such as Edrington and Chivas Regal have recognised the contribution of their workers by granting additional annual leave or through a financial award.

“Let’s remember that Diageo still made a £2.1 billion profit and it has paid out its share dividend, yet it refuses to reward the workforce who delivered this access to the company’s Free Shares scheme.”

On Tuesday (3 August), Diageo announced that its operating profit declined 47.1% to £2.1 billion (US$2.7bn) for the year ending 30 June 2020 due to the impact of Covid-19 on its key markets.

Unite Scotland said that while the group reported a “significant drop” in operating profit, Diageo still made £2.1bn. The trade union also noted that Diageo is planning to pay shareholders a dividend of 69.88p, an increase of 2% on the previous year.

Unite also pointed to Diageo’s £150 million (US$197m) investment in Scotch whisky tourism, which includes the Johnnie Walker experience in Edinburgh and the upgrade of a number of visitor centres across Scotland.

The seven-floor Johnnie Walker visitor centre on Princes Street, Edinburgh, had been due to open to open at the end of 2020 but was delayed because of the pandemic. It will open in the second half of 2021.

Unite said that Scottish producers Edrington and Chivas Regal have given their employees additional annual leave or financial payments as a reward for them being essential workers during the pandemic.

Diageo, the largest Scotch whisky producer, maintained production at its sites during the Covid-19 crisis. In March, Diageo faced calls from Unite to stop production at its bottling and distilling sites in Scotland amid concerns over the safety and stress levels of workers during the pandemic.

A Diageo spokesperson said: “We greatly appreciate the support of all our people during these challenging times. The outbreak of Covid-19 has presented significant challenges for our business, impacting our full-year performance.

“As a result, the threshold for this year’s free shares award for UK employees has not been met. Employees that elected to receive free shares in prior years and still hold them, will benefit from the final recommended dividend payment announced this week.

“In addition to this, Scottish unionised employees received a pay increase from 1 July as per the 2019 union agreement.”

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