Guinness Ireland profits up

Despite a fall in sales of stout on the home market, Guinness Ireland has reported solid growth in the year to the end of June, with operating profits up 11 per cent to €264 million (£208 million) while total sales were 9 per cent higher at €1.25 billion (£985 million).

Details of the Guinness performance came in the full-year results from parent group Diageo, which showed that sales of Bailey's Irish Cream are surging ahead, with an 8 per cent increase in sales to 4.7 million cases. This puts Bailey's in 12th position in the league table of world spirits brands and the group is heading for sales of more than five million cases in the current year.

Although Guinness sales in Ireland were down overall by almost 3 per cent, Guinness Ireland managing director Mr Brian Duffy said there had been an improvement in the second half of the year, with sales during the summer matching last year.

In contrast to the decline on the home market, exports of Guinness - which account for almost half the Irish production - were up 8 per cent, while shipments overall of Guinness brands were up 5 per cent.

Despite the improvement in operating margins, Guinness remains committed to the rationalisation programme announced last July, which involves the loss of 300 jobs through the closure of the Dundalk packing plant and the downsizing of the Dundalk brewery.

Mr Duffy said that Guinness was continuing discussions with the trade unions about the rationalisation plans. "The issue remains, we haven't set any deadline but we have to address the cost of production."

Mr Duffy was at pains, however, to reject recent suggestions that Guinness might be planning to withdraw from Ireland entirely. "We are committed to Ireland, there is no question of us moving out of St James's Gate. It's the heart of the business, it's where we belong."