Diageo has moved to cut costs in Northern Ireland with the overhaul of its distribution network in the province.

The UK drinks giant has contracted out the distribution of its portfolio to TDG Logistics, which will supply Northern Ireland from a single site instead of the four currently owned by Diageo.

The decision to close its three other depots could lead to the loss of over 40 jobs, a spokesperson for Diageo Northern Ireland said today (12 May). However, she added that affected employees would be given the chance to relocate to the remaining site in Mallusk, Co. Antrim, or elsewhere in the organisation.

"The market is very challenging and consumers' drinking habits are changing," the spokesperson said. "Although our premium brands are performing very well, as our logistics costs are fixed and volumes are declining, the cost of delivering our whole portfolio has gone up."

Diageo employs around 580 workers in Northern Ireland with 100 employees holding posts in logistics. The company said the decision to revamp its distribution network would not affect its Bushmills and Baileys sites or its sales department.

The spokesperson refused to disclose how much money Diageo expected to save from the move and added: "This is not just about cost, we want to increase our flexibility and improve our competitiveness and we are hoping to see the benefits of that."