Diageo is to press ahead with a scaled-down restructuring of its brewing operations in Ireland by spending EUR153m (US$195m) to rejuvenate St James's Gate and announcing plans to close its Dundalk and Kilkenny breweries. 

Diageo said today (12 January) that brewing operations in Kilkenny and Dundalk are expected to cease in December and July of 2013, respectively. At the same time, the Guinness brewer will build a new brewhouse at St James's Gate, as part of a EUR153m revamp of the Dublin-based brewing site.

Diageo's president of global supply, David Gosnell, said: "The decision to consolidate to the St James’s Gate site is fundamental to delivering the competitiveness necessary for the long-term sustainability of our brewing in Ireland." As reported by just-drinks before Christmas, the new brewery at St James's Gate remains subject to local council planning permission.

Today's plan is a smaller version of Diageo's original restructuring strategy in Ireland, announced in 2008. Before being placed on hold indefinitely in 2009, Diageo's plan would have seen the group build a EUR650m brewery in Ireland, at the expense of closing its Kilkenny and Dundalk breweries. Also, as part of the original plan, operations at its Waterford brewery would have been scaled back, with St James's Gate being redeveloped.

Diageo said today: "The plans for implementation at St James’s Gate over the next two years will be an important part of securing the long-term competitiveness of Diageo’s beer business and, by concentrating all brewing activity on the St James’s Gate site will, underpin the company’s commitment to Ireland."

Diageo's new brewhouse at St James's Gate will have a capacity of 7m hectolitres, the firm said. It will also build a new grain intake silo and expand its existing fermentation plant on the site.