Diageo has moved to address the £862m gap in its pension scheme – using millions of barrels of Scotch whisky as collateral.

The supply of maturing spirit has a book value of £500m and will provide a regular income stream for the pension fund over a 15-year period.

Diageo will have the option of buying back the whisky from the pension fund as it matures, providing the fund with £25m a year in addition to the payments Diageo has previously agreed to make.

The drinks giant, whose spirits brands include Johnnie Walker and Smirnoff, is also putting around £200m in cash into the fund.

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