Diageo considers plan to redevlop St Jamess Gate

Diageo considers plan to redevlop St James's Gate

Diageo is considering a fresh investment plan to redevelop part of its St James's Gate Guinness brewery in Ireland.

Diageo has been in "exploratory consultations" with Dublin City Council about a possible redevelopment of part of the St James's Gate site, the drinks giant confirmed to just-drinks today (5 July).

A report by today's Irish Times newspaper said that Diageo is considering a EUR100m-plus (US$144.7m) investment.

A Diageo spokesperson told just-drinks: "The company has not made any decision regarding investment. It would be premature to provide any further detail about the project, but we will share information with our staff and the wider community when we are in a position to do so."

News of the possible redevelopment comes only a few weeks after Diageo announced a review of its global operating model. The possible restructure of operations in Europe, where weak national economies have hit Diageo's drinks sales, is central to the operational review. It is set to be complete by August.

Separately, Diageo has had a restructuring and investment programme for Ireland on hold since 2009, mainly due to the onset of the global financial crisis. 

The programme, first announced in May 2008, would have seen the group build a EUR650m (US$945.6m) brewery in the country, at the expense of closing its existing breweries in Kilkenny and Dundalk. Also as part of the original plan, operations at its Waterford brewery would have been scaled back, with St James's Gate redeveloped to focus solely on Guinness production for the UK and Ireland.

just-drinks understands that the entire programme remains frozen. However, the new plan to potentially redevelop St James's Gate could influence what happens to the original restructuring and investment project.