Diageo, Kingfisher Amongst The Big Names To Welcome 'No' Vote

Fri, 19th Sep 2014 09:44

LONDON (Alliance News) - Several big names in the retail and beverage industry have welcomed Scotland's decision to remain part of the UK Friday, after the likes of drinks giant Diageo PLC and home improvement retailer Kingfisher PLC warned ahead of the vote that an independent Scotland would lead to higher prices.

55% of Scottish voters voted Thursday to stay with the UK, with 45% voting for independence.

Drinks giant and Scotch whisky maker Diageo welcomed the news Friday, with Chief Executive Ivan Menezes amongst the top executives that had said before the vote that they would prefer the union to remain intact for business reasons.

Diageo has deep Scottish roots and currently controls around 40% of Scotch whisky production. Its one of Scotland's top manufacturing exporter.

On the company's website it cites that 4,000 of its employees work in Scotland in around 50 sites across the country. It said together, the spirit brands it makes in Scotland generate over GBP3 billion worth of revenue each year.

A spokesperson for Diageo said Friday, "Scotch whisky is a very successful and growing export industry for Scotland. The future for this sector will remain bright provided there is no further regulation or taxation on the industry. This is important because in the world market, Scotch whisky competes fiercely with other categories, such as American whiskey, Irish whiskey and other whiskies.

"We will continue to work in partnership with both the UK and the Scottish governments to ensure the most favourable business environment possible, both for Diageo and for the future growth and success of Scotch whisky as an industry," said the spokesperson.

Diageo shares were trading 2.0% higher Friday morning, at 1,856.00 pence per share.

A spokesperson for both Marks & Spencer Group PLC and Home Retail Group PLC said the retailers are not commenting on the decision, but it is very much "business as usual" for the companies.

M&S, Next PLC and B&Q owner Kingfisher PLC were amongst the big name retailers to warn ahead of the vote that price increases would be passed on to the consumer in an independent Scotland.

Kingfisher CEO Ian Cheshire said the no vote leaves it confident with its investment plans in Scotland.

"We have always said we are committed to trading in Scotland, regardless of the referendum outcome. This result gives us the confidence to continue growing our businesses in Scotland and we will continue with our current investment plans," said Cheshire.

The home improvement retailer's shares were trading 0.4% higher Friday morning, at 318.53 pence.

Next CEO Simon Wolfson told journalists last week that while the prospect of an independent Scotland would not make a difference from a logistics point of view, he was concerned about the "wider economic view" in Scotland, with the risk of higher prices.

Next shares were trading 0.5% higher at 6,945.00 pence Friday morning.

By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty