Diageo under fire after it withholds free shares from Fife staff

Trade union Unite Scotland slammed Diageo after it took the decision to withhold shares from the workforce following the announcement of year-end financial results.

The Freeshares scheme is annually awarded to workers based on company performance.Despite a significant drop in operating profits due to the Covid-19 crisis, Diageo still announced a £2.1 billion profit for the year ending on June 30, 2020.

A dividend will be paid to shareholders of 69.88p – up two per cent on a year ago. The drinks giant is also investing more than £150m for malt distilleries and the conversion of Fraser’s department store on Edinburgh’s Princes Street into the Johnnie Walker visitor centre, which is now expected to be completed in the first half of next year.

Unite Scotland has drawn attention to other drinks companies who have awarded their workers additional annual leave or financial payments in recognition of the contribution during the Covid-19 pandemic.

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 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 Freeshare scheme.”

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