IRELAND: Diageo invests in new brewery at cost of two closures

By | 9 May 2008

Diageo is to invest EUR650m (US$1bn) in its brewery infrastructure in Ireland, including the building of what will be its largest brewery. However, the company also said it would be closing two other breweries as a result.

The new proposals, which the brewer says are necessary to "deliver the global competitiveness necessary for future growth and sustained success," will involve the upgrading and consolidation of the St James's Gate brewery to produce Guinness primarily for the Irish and British markets.

Meanwhile, a new "state of the art" brewery will be built to produce Guinness, ales and lagers, the location of which is yet to be announced. The company said it will produce Guinness to meet growing export demand.

Upon commission of the new brewery in 2013, all production from existing breweries in Kilkenny and Dundalk will be transferred, resulting in the closure of the two facilities and loss of 250 jobs.

Although having both played a "critical" role in the historic success of Diageo's beer brands in Ireland, the brewer said they do not have the scale necessary for sustained success in "increasingly competitive market conditions" and are not a suitable size for the new brewing operation.

Operations at Diageo's Waterford brewery will also be "streamlined" as part of the re-organisation.

"I want to fully acknowledge the huge role and heritage of the Kilkenny and Dundalk breweries, which would cease operations once the new brewery is fully commissioned," said Paul Walsh, chief executive of Diageo. "I believe that the lessons and experience we draw from their valuable tradition and heritage can only help to enrich our new brewery."

Following the completion and commissioning of the new breweries, surplus land on parts of the St James's Gate site and in Dundalk and Kilkenny will be available for redevelopment and is estimated to have a value of approximately EUR500m.

The "rejuvenation" of the St James's Gate brewery will mean the Guinness Storehouse will continue its development programme to accommodate growing visitor numbers.

"This proposal will support the long-term success and growth of Guinness around the world, as well as the other beers we brew for Ireland, Great Britain and international markets," said Walsh. "Our ambition is to create a brewing hub, which will meet the highest standards of technology, efficiency and environmental management."

The company said it will now engage in formal consultation with employees on the implementation of the proposal.

Sectors: Beer & cider

Companies: Diageo, Guinness

View next/previous articles

Currently reading -

IRELAND: Diageo invests in new brewery at cost of two closures

There are currently no comments on this article

Be the first to comment on this article

Related articles

just the round up - The week in drinks

Scroll down to view the top 10 stories published on just-drinks this week.

US: Premium spirits market still growing - Diageo

An economic slowdown has caused more US consumers to trade down on drinks, but figures show that the premium spirits category remains buoyant, Diageo executives have said.

INDIA: Diageo silent on Radico Khaitan split

Diageo has refused to comment on speculation that it is planning to exit its joint venture with Radico Khaitan in India.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page