Pernod ready to cull workforce

This from The Scotsman, Friday November 18th
-------------------------------------------------------
Pernod ready to cull Scots workforce
ALASTAIR REED

PERNOD Ricard has kicked off a major review of its operations in Scotland in what looks to be the beginning of a much-expected clear-out of the former Allied Domecq workforce - a move that could result in hundreds of jobs being lost north of the Border.

Speculation that Pernod, the world's second largest drinks company, is to slash Allied's 1,200-strong workforce in Scotland has been rife since its £7.6 billion takeover in July.

News that a strategic review has now started, with a view to cutting excess capacity, is the latest sign that the integration and consolidation process has started in earnest.

When the deal was completed, analysts said Pernod would be left with an overcapacity in Scotland and would have to "rationalise" certain functions to achieve the £300 million savings it is targeting.

An industry insider told The Scotsman yesterday that a review had now started in earnest. HR and communications teams have both been laid off, and other moves could result in significant Scottish job losses next spring, when it is expected to be finished, he said.

"The whisper in the Scotch whisky industry is that they're looking to centralise all bottling at Kilmalid [Dumbarton], which is bigger and more modern, plus it has plenty of room for expansion," he told The Scotsman.

"The Chivas bottling plant at Paisley could be closed and the land sold off for development, while the bottling plant at Newbridge also looks to be under threat."

The source said Pernod was also looking at its brand portfolio to determine "which ones they want to retain and grow and which other ones could be sold".

Pernod already owns Chivas Brothers and Glenlivet in Scotland and has two large new facilities at Paisley and Newbridge, to the west of Edinburgh, employing 500 and 150 respectively. Through the Allied acquisition it added brands including Ballantine's, Scapa, Glendronach and Tormore, along with Beefeater gin, Malibu rum and Stolichnaya vodka.

It has also taken on about 400 at Allied's plant in Dumbarton, where it has two modern high-speed bottling halls. Paris-based Pernod has already announced that it is planning to shut its Kilwinning bottling plant and Linwood distribution hub this year, affecting 93 employees. Now unions and employees are bracing themselves for even worse news.

So far, Pernod is believed to have laid off three directors at the Allied Distillers' plant in Dumbarton, reassigned another, and fired a master blender.

Another source close to the situation confirmed yesterday that the division's six-strong communications team had also been laid off in the past two weeks.

A spokeswoman for Pernod confirmed task forces had been set up to look at its Scottish operations when the deal was announced on 26 July, but said she was unable to comment further.

"As far as bottling is concerned, we have no intention of closing any of the three bottling sites in Scotland," she said. "But I simply can't comment on speculation or anything we haven't already announced."

Dingwall eyes up 'unloved' distilleries

PERNOD'S ongoing strategic review could play into the hands of Venture Production founder Bruce Dingwall, who is in the process of reinventing himself as a "whisky scavenger" - despite learning his trade in the North Sea oil and gas industry.

Only last week, Dingwall told The Scotsman there were strong similarities between the consolidation in the North Sea ten years ago and the consolidation in the drinks industry today. As a result he is aiming to pick up "unloved assets from large companies" - and could get his opportunity sooner than expected.

Since acquiring Chivas from Seagram in 2000, Pernod has mothballed several distilleries, including Allt a'Bhannie, Braeval, Caperdonich and Glen Keith. In addition, Allied's mothballed Imperial distillery, at Carron in Moray has been added to that list since then. All could be available at the right price.