Diageo officially opens new €169m Dublin brewery

Guinness producer Diageo has said it is confident of growing exports further and halting the decline in sales of stout following the official opening of its new €169 million state-of-the-art brewery at St James's Gate in Dublin.

The facility, which is the biggest stout brewery in the world, will produce approximately 1 billion pints a year. Most of this will be exported to 130 markets across the globe.

Speaking at the opening of Brewhouse No.4 in Dublin on Wednesday, Diageo chief executive Ivan Menezes described it as a great day for Diageo and for Guinness. He said the new brewery, which consolidates all brewing by the company in Ireland at Victoria Quay, St James’s Gate, as evidence of Diageo’s commitment to Ireland.

“Our decision back in late 2011 to invest in St James’s Gate represented a €169 million vote of confidence by Diageo in Guinness and in our beer business. It also represented a major vote of confidence in the Irish economy itself,” said Mr Menezes.

“This is only the fourth brewhouse to be built on this site and it marks an exciting new chapter in the 255-year-old history of the Guinness brewery in Dublin,” he added.

The creation of the 10,000 m2 brewery was first announced in 2012 when Diageo said it would close its breweries in Kilkenny and Dundalk, with the loss of 100 jobs. The two plants manufactured Smithwick’s, Kilkenny ale, Budweiser and Harp Lager.

Prior to the development of Brewhouse No.4, which was the largest construction project undertaken in the country in 2012, Diageo had planned a €650 million investment to overhaul its brewing activities in Ireland. However, this was shelved as a result of the global financial crisis.

Speaking to The Irish Times, Mr Menezes, who took over the reins at Diageo in July 2013, said that Ireland remained one of the company’s biggest markets, while Guinness was an iconic brand and one it remained heavily committed too.

“Consumers love that we’re still in our home of more than 250 years...we have more than 9.000 years left on our lease so there’s plenty more to come,” he said.

“We’ve been here for a long time and this is a major investment for us. We export our products around the world from Ireland and we think the growth potential is terrific,” he said, highlighting opportunities in a number of emerging markets.”

“I look at Africa as a tremendous engine of growth for Diageo overall and particularly for our beer business and for Guinness and we’re upping our investment substantially there.”

Mr Menezes said that Ireland’s business friendly environment was a key factor in persuading the company to invest in the new brewery. Nonetheless, he said that steps had to be taken in terms of excise on alcohol, which he claimed was extreme compared to other European countries.

“I’m not happy with the excise environment in Ireland, it has gone way too high. We need to address this and create a more competitive environment,” he said.

While stout may be all the rage in Africa, in other markets it is a different story with sales having declined substantially over the past years, most notably in Ireland. Mr Menezes said the company was working to boost sales of Guinness both here and overseas with the introduction of new products such as Dublin Porter and Guinness Blonde, which has been developed for the US.

“We need to ensure the brand stays relevant to every generation of consumer in every market in which we compete. I think that the interest that consumers have in quality beer is very positive because they are looking for quality, authenticity and heritage and ultimately we’re blessed because that’s what we’re about,” he said.