Diageo closes famous Glasgow distillery - 500 jobs to go as drinks firm overhauls Scottish operation

The jobs will go over the next two years, but Diageo said changes in the region will also see 400 jobs created through the expansion of its packaging plant in Fife.

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Diageo – the group behind brands including Guinness, Smirnoff vodka and Johnnie Walker whisky – is also restructuring its brewing operation in Ireland to cut costs, but is yet to reveal the impact on jobs or its three Irish breweries.

The group's restructuring in Scotland will mark the end of nearly 200 years of distilling at the Port Dundas operation in Glasgow.

Around 140 jobs will be lost when the distillery and its adjacent Dundashill Cooperage close, although Diageo is hoping to relocate some staff to a new cooperage in central Scotland.

Diageo said its "long-term grain whisky requirements can be best met" at the group's Cameronbridge distillery in Fife, which is being expanded.

The decision to close its Kilmarnock packaging plant and consolidate operations in its other two facilities in Glasgow and Fife will have the biggest impact on jobs, with 700 roles to go by the end of 2011.

It hopes to transfer a number of axed positions to the Fife plant, which is being expanded under an 86 million scheme.

Changes at its Shieldhall packaging plant in Glasgow will also lead to 30 job losses, said Diageo.

And the group is relocating around 80 office-based staff from Dundas House in Glasgow to another location in central Scotland over the next two years.

Outsourcing deals for its Hurlford consolidation warehouse in Ayrshire and Speyside haulage operation for distillery co-products are set to see 80 jobs transferred.

Scotland is one of Diageo's largest spirit supply centres, currently employing around 4,500 people and producing nearly 50 million cases of Scotch whisky and white spirits.

Kilmarnock and Loudoun Labour MP Des Browne said the news was "devastating".

He said: "Every bottle of Johnnie Walker has a label which says that this whisky has been bottled in Kilmarnock since 1820.

"The town of Kilmarnock and the people of Ayrshire have contributed to this business's profits for nearly two centuries.

"I'm told that these are proposals. The company now needs to work with their staff in Kilmarnock and revise these proposals as they did 10 years ago to maintain this presence in and these jobs.

"That's what I'll be working for from today."

Mr Browne added that he had called for a meeting with Diageo management.

A spokesman for The Scotch Whisky Association said: "We've no doubt these will have been difficult decisions to take.

"The Scotch whisky industry is working hard to invest to secure its sustainability and competitiveness, which is so important to the Scottish economy.

"We continue to believe whisky has a strong long-term future, as shown by Diageo's own commitment to investing in new and expanded facilities in Scotland."