A company restructuring plan calls for the closure of a Johnny Walker bottling plant in Kilmarnock and a grain distillery in Glasgow, The Scotsman reported Wednesday.
The plan provoked a protest march in Kilmarnock with 20,000 people participating. Scottish Finance Secretary John Swinney presented the company with a variety of alternate proposals, including building a new plant in Kilmarnock, the newspaper said.
David Gosnell, managing director of Diageo Global Supply, called the meeting with government officials "positive" a week ago, then announced this week the proposals were not viable and the talks would discontinue.
"I appreciate their efforts but the task force has no workable alternative to deliver what Diageo needs," he said.
Swinney, in reply, said, "I do not believe that Diageo appreciate the social consequences of their financial decision in turning their backs on 200 years of history in Port Dundas and Kilmarnock."
Labor leader Iain Gray said he was "deeply disappointed that John Swinney has been unable to bring forward a plan capable of convincing Diageo to save these jobs."
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