Diageo's 'Windsor' Sale Faces Multiple Obstacles... Union Opposition and Legal Actions Also Mentioned

Diageo Sells Windsor Brand for 200 Billion KRW
Union: "Clear Violation of Collective Agreement... Will Take Legal Action"
Diageo: "Not a Legal Violation... Discussing Cooperative Solutions"

[Asia Economy Reporter Song Seung-yoon] The sale process of Diageo Korea's Windsor division, the largest whiskey importer in South Korea, is expected to face difficulties. The labor union, which has opposed the sale and even conducted strikes, is strongly protesting the decision and has hinted at legal action.

According to industry sources on the 30th, the Diageo Korea labor union will enter its 16th negotiation session (estimated by the union) with management this morning. Originally, both the union and management were presenting wage increase proposals to find common ground, but the Windsor sale has made today's negotiations challenging. After Diageo announced the sale, the union held internal meetings and announced plans for legal action. Specifically, they are considering filing complaints with the Ministry of Employment and Labor or the prosecution for violations related to labor laws, including breaches of the collective agreement.

Earlier on the 25th of this month, Diageo Korea announced it would sell the Windsor whiskey brand, including the W series, to a domestic private equity consortium 'Bayside Private Equity - Metis Private Equity.' The sale price is 200 billion KRW, and the transaction is expected to be completed within the 2023 fiscal year. At the time, Diageo explained that this was part of their ongoing active portfolio management and pledged to cooperate with employees, the labor union, customers, and Bayside to ensure smooth execution.

The union strongly opposed the move, calling it a "clear violation of the collective agreement." On the same day, the union issued a statement expressing their determination to resist until the end to protect members' working conditions and job security. They argued that management violated a clause requiring a 90-day prior notice of the sale to the union. The union's main concern is job security following the sale of the Windsor brand, which accounts for a significant portion of the company's revenue. They fear uncertainty regarding employment succession and workforce reallocation after the sale. The union has also demanded wage increases and the complete withdrawal of the revised personnel system, leading to a general strike since the 7th of last month.

Diageo stated that nothing has been decided beyond the signing of the sale agreement. They said they intend to discuss these issues thoroughly with the union through negotiations and proceed with necessary procedures accordingly. Regarding the alleged collective agreement violation, Diageo claims that the timing of the sale decision is viewed differently and thus does not constitute a legal breach. A Diageo representative said, "We initially aimed to complete this process by July this year, but if labor-management consultations do not proceed, it could become difficult. We will do our best to reach a conclusion that allows both the company and employees to coexist."

This content was produced with the assistance of AI translation services.