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CAMPAIGN: DIAGEO
HISTORICAL AGREEMENT
Historic Agreement Secures Financial Future for Thalidomide
Survivors
8 December 2005
Diageo plc
Joint Press Release issued by: Diageo plc;
Thalidomide UK and the Thalidomide Trust, National Advisory
Council;
Diageo plc has agreed a new financial
settlement for those affected by the drug.
This historic agreement has been reached
between Diageo plc, the Thalidomide Trust's National
Advisory Council (NAC), and Thalidomide UK, all of whom
recognised that existing resources supporting survivors of
thalidomide were unlikely to be sufficient to meet their
continuing needs in the coming years. All parties believe
that this agreement will be full and final.
Thalidomide was originally distributed in the
UK under licence by the pharmaceutical subsidiary of the
Distillers Company. It was withdrawn in 1961 when the side
effects for pregnant women were discovered.
In 1986 Guinness (a predecessor company of
Diageo) acquired the Distillers Company. Diageo plc
currently makes an annual payment of £2.8 million to the
Trust and in 2005 an additional special contribution of £4.4
million was made. Under the terms of the agreement the
future annual payment will increase to around £6.5 million
per annum under a covenant payable over the period to 2037.
This amount will be index-linked.
This will enable the Thalidomide Trust - the
charitable body that provides ongoing support to Thalidomide
survivors - to gradually and significantly increase its
annual payments to its beneficiaries and ensure that they
will have financial security for the rest of their lives. In
conjunction with this settlement, Diageo is giving one
year's notice that no further direct individual claims
against Distillers or Diageo will be considered after 31
December 2006.
Thalidomide UK President and NAC member,
Freddie Astbury, said:
'After 13 years of campaigning which included
a hunger strike to highlight the plight of the Thalidomide
beneficiaries who were facing an uncertain future due to
inadequate trust funds available, Thalidomide UK is
extremely pleased and relieved to have finally reached this
agreement. Diageo is to be commended for its positive
approach and recognition of need that has brought about this
agreement, and we feel vindicated in respect of the just
struggle maintained on behalf of those afflicted so long by
this drug.
The objects set out in the settlement will alleviate many of
our concerns in that it establishes a securer future for us
all.
We are delighted Diageo have recognised the further
necessity for much needed funding and we commend its
long-term commitment to Thalidomide beneficiaries.'
Lord Blyth, Chairman of Diageo plc, said:
'We very much regret the thalidomide tragedy
which happened 44 years ago. The suffering and hurt of those
affected has troubled us all. We are very pleased that this
agreement has been reached after a process of very
constructive negotiation with the representatives of the
Thalidomide survivors’ community.
We acknowledge the efforts of all those
involved in recent discussions to bring this matter to a
mutually agreed conclusion'
Nick Dobrik campaigner and NAC deputy
chairman said:
'This settlement is tremendously important
for all those affected by thalidomide.
Some of the Thalidomide Trust's beneficiaries
are wearing out their bodies at an accelerated rate because
of initial damage by the drug and the ways in which they
have tried to overcome its effects. These extra funds will
help them to live with increasing levels of disability as
they get older and will ensure that those affected by
Thalidomide will have a future that is financially secure.
I'm pleased to say that Diageo, as the
successor company to The Distillers Company, has taken its
responsibilities seriously, listened carefully to our
concerns, and we have been able to secure a sustainable
future for all thalidomide survivors in the UK. This deal
represents the spirit of co-operation in which they entered
discussions with us.'
-Ends-
Notes to Editors:
The Thalidomide Trust was established in 1973 to provide
ongoing support to those affected by the drug. The Trust
currently supports 454 surviving thalidomide beneficiaries.
The average payment from the Trust to each beneficiary was
around £13,000 a year in 2004.
The National Advisory Council of the Thalidomide Trust (NAC)
is a body elected by the Trust's beneficiaries to advise the
trustees on matters of policy and expenditure.
Thalidomide UK was founded in 1993. As a group it had three
main objectives: to highlight the inadequacy of the original
financial settlement, to bring awareness and raise concerns
in the deterioration of the health in beneficiaries and to
pressurise those who are involved in the use of the drug
today for stricter guidelines.
Diageo is the world's leading premium drinks business. With
its global vision, and local marketing focus, Diageo brings
to consumers an outstanding collection of beverage alcohol
brands across the spirits, wine and beer categories
including Smirnoff, Guinness, Johnnie Walker, Baileys, J&B,
Cuervo, Captain Morgan and Tanqueray, and Beaulieu Vineyard
and Sterling Vineyards wines. Diageo trades in some 180
countries around the world and is listed on both the New
York Stock Exchange (DEO) and the London Stock Exchange (DGE).
For more information about Diageo, its people, brands and
performance, visit
www.diageo.com
Background:
In the 1970s, The Distillers Company (Biochemicals)
Limited (DCBL), which had been the distributor in the UK
from 1958 to 1961 of Thalidomide products under licence from
Chemie Gruenenthal of Germany, settled the vast majority of
UK Thalidomide claims on terms approved by Court at that
time. DCBL has at all times denied legal liability for such
claims. DCBL is now a non-trading subsidiary of Diageo plc.
Since the 1970s, new claims have been made by individuals
who claimed to have suffered injuries as the result of their
mothers taking Thalidomide. These claims were not covered
by the earlier settlement arrangements. In cases where it
could be demonstrated that, on the balance of probabilities,
UK Thalidomide was the cause of their injuries the claimants
were brought within an 'unofficial' and ex gratia
compensation scheme: without admission of liability or
waiver of limitation defences they have been treated on a
basis equivalent to the 1973 settlement for the purposes of
the calculation of damages and interest. Those claimants
who were accepted by DCBL as having been injured by
Thalidomide have normally applied to the Thalidomide Trust
to be accepted as a beneficiary.
After pressure from campaigners, the Government changed the
tax status of the Thalidomide Trust so that – with effect
from August 9 2004 – all payments to beneficiaries were
exempt from tax.
It is now more than 44 years since
Thalidomide was withdrawn from the UK market and it has
become increasingly difficult to find the relevant factual
and expert evidence as to causation of injuries in
individual cases. Diageo has therefore decided that, in
conjunction with the substantial additional long-term
provision which it has made for the Thalidomide Trust, no
further claims will be considered under the unofficial
compensation scheme unless they are notified to Diageo with
appropriate supporting evidence by 31 December 2006. Any
individuals who have not notified claims by that date may of
course continue to apply to the Thalidomide Trust and, if
accepted by the Trust as injured by UK Thalidomide, will be
entitled to tax-exempt benefits from the Trust.
Diageo Review 2011
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