Politicians and unions have attacked Diageo’s plans to eliminate 900 jobs in Scotland by closing a packaging plant and a distillery.

The world’s biggest drinks group, whose brands include Guinness, Johnnie Walker, J&B, Cardhu and Talisker, said that it was responding to a tough trading environment by initiating the £120 million restructuring.

The overhaul, which will save an estimated £40 million in 2012, will involve closing its grain spirit distillery at Port Dundas, Glasgow, and a packaging plant in Kilmarnock, Ayrshire.

Des Browne, the Labour MP for Kilmarnock and Loudoun, described the news as devastating. “Every bottle of Johnnie Walker has a label, which says that this whisky has been bottled in Kilmarnock since 1820,” he said. “The town of Kilmarnock and the people of Ayrshire have contributed to this business’s profits for nearly two centuries.”

John Swinney, the Cabinet secretary for finance in Scotland, said: “The Scottish government is asking the company to reconsider this course of action and to look at alternatives which protect employment.”

Alex Salmond, Scotland’s First Minister, is expected to meet executives today.

Grahame Smith, general secretary of the Scottish TUC, said: “The announcement is a massive blow to the individuals concerned and their families. The impact on the Kilmarnock area is potentially devastating.”

Diageo said that the jobs would go over the next two years. However, the company will also create 400 jobs in the region by expanding its packaging plant at Leven, Fife. A spokesman said that the Scottish restructuring was unrelated to demand for Scotch whisky, which remains strong, but was part of a wider efficiency drive. He added that Port Dundas produced only grain spirit for use in whisky, vodka and gin, rather than any prized malts. Grain spirit production will be consolidated at the group's Cameronbridge distillery in Fife, which is being expanded.

The closure will cost 100 jobs at the distillery and 40 jobs at the cooperage near by, although the group is hoping that some of the coopers can be relocated to Cambus, Alloa.

The biggest job losses will result from the phased closure of the packaging plant in Kilmarnock, where Diageo has 700 staff. The company is also shedding jobs at a warehousing facility in Hurlford, Ayrshire, which is being outsourced to Malcolm Group, a logistics company. Sixty-four staff will transfer to Malcolm Group and 36 will be relocated within Diageo.

Scotland is one of the company’s most important areas of operation. It employs about 4,500 people in the country and produces nearly 50 million cases of Scotch whisky and white spirits.

The move is in addition to the £200 million restructuring announced in February, which it was estimated would cut costs by £100 million in the financial year to June 2010, as well as reducing Diageo’s global workforce of 23,000 by more than 1,000 posts. The group has raised the forecast savings from February’s overhaul by £20 million to £120 million, while upping the forecast cost of implementing it to £270 million, of which £180 million will fall in the new financial year.

Diageo also updated the market on the costs of the overhaul of its operations in Ireland. The plan announced last year had included a scheme to sell part of the Guinness brewery site at St James’s Gate in Dublin and build a brewery outside the city. Diageo said that it would press ahead with a revised proposal that would have “substantially the same scope as the original, namely the restructuring of all three Diageo breweries in Ireland”.

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