Diageo averts strike with unions over pay at Scottish distilleries

By Siddharth Cavale

(Reuters) - Diageo Plc <DGE.L> averted a planned strike on Tuesday at Scottish distilleries after reaching an agreement on worker pay with the GMB and Unite unions, a representative for the company said.

The two-year deal includes a 3% pay increase in the first year and then a cost of living increase and a performance-based incentive bonus in the second year, the company said.

"We are pleased to have reached agreement on a good, fair offer that ensures our employees can receive an increase on their pay while maintaining the competitiveness of our operations," the company said in a statement.

More than 1,000 workers at Diageo's Scottish distilleries were set to go on strike, starting 2100 GMT on Tuesday.

The unions had demanded pay hikes of 5%, Reuters reported last week.

"The offer is a two-year commitment on pay and also sets out a time frame for the negotiation of a new collective agreement," GMB Scotland said http://bit.ly/2ZYXsJC.

The unions have previously said that the strike action at the company's Cameronbridge, Leven and Shieldhall sites by its members, who make up half of Diageo's Scottish workforce, would bring bottling, maturation and distilling operations to a standstill.

At the three sites, the company produces for brands including Johnnie Walker, Lagavulin and Talisker.

Diageo, the single biggest exporter of whiskey from Scotland, exports 80% of the whiskey produced at its 29 distilleries in Scotland to 180 countries.

(Reporting by Siddharth Cavale and Philip George. Additional reporting by Maria Ponnezhath in Bengaluru; Editing by Shailesh Kuber and Lisa Shumaker)