• Up to 99 jobs to go across Kilkenny, Dundalk
  • New brewery still an option for future
  • Guinness brewer plans EUR153m (US$195m) revamp of St James's Gate
Diageo plans to revamp St Jamess Gate brewery site

Diageo plans to revamp St James's Gate brewery site

Diageo is set to cut up to 99 jobs in Ireland as part of its plan to restructure brewing operations in the country, but the group has not ruled out building a new brewery in the future.

The company announced today (12 January) that it will 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 will close its Dundalk and Kilkenny breweries.

When contacted by just-drinks, a spokesperson for the brewer said that up to 99 jobs could be lost between Kilkenny and Dundalk, once these sites are closed in 2013. Diageo employs around 1,500 people in Ireland. "We will look for re-deployment opportunities for these employees, but due to the numbers those opportunities are likely to be limited," the spokesperson said.

As part of the move, the spokesperson added that brewing capacity at St James's Gate will increase by 40%, to 7m hectolitres. Diageo wants to build a new brewhouse at the Dublin-based site, although it is waiting on planning permission. 

Today's plan is a reduced 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 Leixlip, Ireland, 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 being redeveloped.

When asked to comment on the situation regarding Waterford and Leixlip, the Diageo spokesperson said: "Waterford is not part of this review. This does put on hold for now our plans associated with the development of Leixlip, but given our growth ambitions for Guinness this is something that we can reconsider in the future."

Diageo's president of global supply, David Gosnell, said: "The decision to consolidate the St James’s Gate site is fundamental to delivering the competitiveness necessary for the long-term sustainability of our brewing in Ireland."

The firm's total production capacity in Ireland is 9m hectolitres and the group was keen to highlight that its plan is more about efficiency than expansion. "The key point is that this is a consolidation of operations to ensure that we are operating with maximum efficiency," its spokesperson said.

Diageo said that it will also build a new grain intake silo and expand its existing fermentation plant on the St James's Gate site. The Dundalk and Kilkenny sites are expected to close permanently in 2013, in July and December respectively.