Diageo plans €153m brewhouse at St James's Gate

 

DRINKS GIANT Diageo plans to invest €153 million to build a new brewhouse at its famous St James’s Gate brewery in Dublin.

However, its breweries in Kilkenny and Dundalk are to close next year with the loss of up to 99 jobs.

In Dublin, the company is to seek planning permission for a new brewhouse on the northside of its St James’s Gate campus, which runs from James Street to Victoria Quay close to Heuston train station.

This will result in the creation of about 300 jobs during the construction phase, which could take up to two years to complete.

It would increase the capacity of the St James’s Gate brewery to about seven million hectolitres from its current level of five million.

This investment would result in all beers made by Diageo in Ireland being brewed at St James’s Gate, thereby securing its long-term future.

The Kilkenny brewery, which is more than 300 years old, currently produces Budweiser and Smithwick’s, while Dundalk is responsible for Harp, Carlsberg and Smithwick’s.

The Dundalk brewery is due to close in July next year, while Kilkenny is expected to shut in December of that year. Employment at both sites has been scaled back in recent years with Kilkenny currently employing 44 and Dundalk 55. A spokeswoman for Diageo said there would be a “limited amount of opportunities for redeployment” to St James’s Gate.

Staff were said to be “shocked” by yesterday’s announcement.

Willie Quigley, an official with the Unite trade union in Dundalk, said the mood among its members there was sombre.

“Redeployment will be on the agenda and if it can happen it will be welcomed but the indications aren’t great,” he said.

The company had signalled its intention to close the Kilkenny and Dundalk breweries in 2008 as part of an ambitious €650 million plan to overhaul its brewing here. They were originally scheduled to shut this year.

That plan involved the construction of a super brewery in Leixlip, Co Kildare, on lands owned by the Guinness family and a slimming down of its activities at St James’s Gate. The economic crash in late 2008 resulted in Diageo shelving that plan as consumption fell sharply. It now appears to have abandoned the idea of building a new brewery in Leixlip.

Diageo expects to begin work on the brewhouse in Dublin in the second half of this year, subject to planning permission. When completed, the existing brewhouse, which is about 40 years old, will be decommissioned.

This will be Diageo’s second-biggest global investment in brewing or distilling facilities. The St James’s Gate brewery currently produces Guinness primarily for the Irish, British and US markets.

David Gosnell, president of Diageo’s global supply, said the investment was a “significant expression of confidence” by the company in its Irish operation.

Minister for Jobs, Enterprise and Innovation Richard Bruton said the investment represented a “huge vote of confidence in the Irish economy” by Diageo.