Guinness brewer Diageo is to spend £520M between 2009 and 2013 on the renovation of its world-famous St. James’s Gate brewery and the construction of a new multi-product brewery close to Dublin.
Diageo expects to recoup around £400M by selling surplus land on parts of the St. James’s Gate site following completion of these works. At the same time, it will also close two smaller breweries at Kilkenny and Dundalk. Net staff losses will be 250.
The renovated St. James’s Gate brewery will brew Guinness primarily for the Irish and British markets and the new brewery will produce Guinness to meet growing export demand, plus ales and lagers for the Irish market, said the company. The Guinness Storehouse, Ireland’s most popular tourist attraction, will continue to be based at St. James’s Gate.
The one-off cash costs of £120M relating to the restructuring will be treated as an exceptional cost mainly in the fiscal year ending June 30 2008. In addition, accelerated depreciation in respect of plant and equipment will be provided as an exceptional item over the period of the closure of the facilities.
Paul Walsh, Diageo’s chief executive, said: “Over the last 12 months we have conducted a rigorous review of our brewing operations in Ireland. It examined many options and I believe it has identified the right formula for the long-term success of our business in Ireland and for the continued global success of the Guinness brand. Our ambition is to combine the most modern brewing standards with almost 300 years of brewing tradition, craft and heritage.”