Diageo workers in Ireland face new threat of job losses

DRINKS GIANT Diageo is reviewing its operations in Ireland with a view to job cuts being implemented among its 1,800-strong workforce on the island.

This is part of a wider restructuring plan being formulated by the London-based company for its European operations. An announcement is expected shortly, possibly this week.

It is not clear how many redundancies will be sought in Ireland as part of the restructuring but sources familiar with the plan suggested it would be “significant”.

Diageo operates three breweries in Ireland – at St James’s Gate in Dublin, Dundalk and Kilkenny – and owns the Bushmills whiskey distillery in Northern Ireland. It employs significant numbers in sales and marketing, and a range of administrative and corporate functions.

When contacted by The Irish Times yesterday, Diageo said in a statement: “We have recently embarked upon a review of our European operating model, which is still in train. It is far too early to attempt to signal any outcome, and we are also committed to the principle that our employees and their representatives should understand any potential impact first.”

It is understood that Diageo last year looked at combining some corporate functions at its businesses in Ireland and Britain. This would have resulted in some activities being moved to London and redundancies being implemented here. This may form part of the company’s latest restructuring plan.

Beer sales have declined in Ireland for some years, due to the recession, the ban on smoking, and tougher drink-driving laws. The availability of cut-price beer in off licences and supermarkets has also played a role.

In February, Diageo said Ireland was the “key driver” of a 4 per cent net sales decline in beer in Europe. This was attributed to weakness in the “on trade”, particularly in rural areas.

In 2008, Diageo unveiled plans to build a super brewery in Kildare as part of a €650 million investment programme that would have resulted in the Kilkenny and Dundalk breweries closing and some land at St James’s Gate being sold. The plan was put on ice at the start of 2010 due to the recession.