Ireland’s dilapidated economy looks to have forced Diageo to shelve plans for a full-scale overhaul of brewing operations for at least 12 months.
Diageo confirmed to just-drinks last night (1 February) that it has suspended its brewery restructuring plan indefinitely in Ireland.
With Ireland’s economy, and drinks industry, reeling from the worst recession to hit any country in Western Europe, it appears that the global drinks giant is hedging its bets until it has a clearer picture of consumer demand.
A deterioration of Ireland’s on-trade during recession and a crash in property prices have made Diageo plans unattractive.
The group originally intended to sell off land occupied by its Kilkenny and Dundalk breweries for around EUR500m (US$695.5m), and use the proceeds to help build a EUR650m state-of-the-art brewery outside of Dublin.
The St James’s Gate and Waterford breweries were to remain open, but would be streamlined – particularly Waterford.
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