Guinness review may see up to 200 jobs cut

Guinness is conducting a wide-ranging review of its Irish operations, fuelling suggestions that it may be preparing to shed as many as 200 administrative jobs.

The company says it is determined to cut overheads after the merger late last year of its brewing and distilling divisions in Dublin. Declining to comment on persistent reports that it is set to make up to one-third of its sales and marketing division redundant, Guinness said it had embarked on a root-and-branch re-assessment of non-manufacturing activities and would announce a "new business approach" in late June, following consultations with staff.

But a spokeswoman was adamant operations would not be transferred overseas. The review was being overseen by Irish executives who were committed to maintaining a presence in the Republic, she said.

The move was prompted by parent group Diageo's decision last year to combine its Guinness and United Distillers and Vintners (UDV) support offices in the capital. With a combined administrative workforce of 700, the group believes the newly constituted Diageo Ireland is unwieldy and that overheads can be trimmed. The future of Guinness sales offices in Cork, Galway and Dundalk is also being assessed.

"Since the beer and the wine and spirits divisions were integrated it has always been the intention to change the company's business model," said the spokeswoman. "But it is too early to say if there will be any job losses as a result. The fact is that no decisions have been reached."

Administrative workers are represented by a staff association that has been involved in talks with the company. Guinness says it will unveil a cost-cutting plan at the end of June.

The drive to lower expenditure comes as Diageo attempts to reverse sliding sales and static profits in Ireland. Last month management signalled its determination to reduce costs when they told workers at the UDV Baileys Irish Cream distillery at Nangor Road, west Dublin that 24 voluntary lay-offs would be sought in early summer.

Guinness Ireland sales in the six months to December undershot predictions, rising by just 2 per cent to €550 million while operating profits were flat at €140 million. Diminishing consumer confidence had eaten into revenues, Guinness admitted.

Its stable of lagers - including Carlsberg and Budweiser - was heaviest hit with volumes declining by an unprecedented 6 per cent compared with a sector average of 3 per cent.

However, Guinness stout delivered "an encouraging performance in a difficult market", stemming recent declines to hold its market share in the period, the company said.