Drinks conglomerate Diageo has announced a plan to upgrade the famous Guinness brewery at St. James gate and build a new brewery near Dublin, but also that it is selling property around St. James Gate and cutting 250 jobs.
This has led to speculation Diageo intends to sell Guinness, one of few beers in a portfolio dominated by spirits such as Smirnoff.
Paul Walsh, the chief executive of Diageo, said instead that Diageo had a five-year plan for Guinness. “This should make Guinness a more valuable asset for Diageo and its shareholders,” he said. “It would be a very convoluted way to go about selling Guinness.”
Rumors swirled a year ago that that Diageo would sell St. James’s Gate after it announced a review of the site. Walsh confirmed that this had been an option, but was discarded in favor of the new plan.
The company indicated plans to invest $1 billion at St. James Gate and on the new brewery. When work is completed in 2013, the firm’s existing plants in Kilkenny and Dundalk will close.
Diageo said its Kilkenny and Dundalk breweries had “played a critical role in the historic success” of Diageo’s beer brands in the Republic.
But a lack of scale “necessary for sustained success in increasingly competitive market conditions” meant that new plans had to be made.