Diageo said today it had agreed to pay an initial annual £100 million (€145 million) towards its UK pension scheme deficit.
The maker of Guinness, Smirnoff vodka and Johnnie Walker whisky said the UK deficit was £653 million (€948 million) at the end of 2005 and would be paid off over seven years.
The first £100 million instalment will be paid after the pension trustees have made another assessment of the deficit at the end of this month.
"In addition to the deficit funding, Diageo will continue to make a cash contribution in respect of annual benefits awarded to active members, which in the year ending 30 June 2006 is expected to be £50 million," it said.
These arrangements are not expected to lead to a change in Diageo's previously announced share buyback programme, it added.