250 jobs to go as Diageo revamps Irish brewing operation

Diageo said it expects around 250 jobs to go following a proposed £520m investment and restructuring programme across its Irish brewing facilities.

The group said that following a "comprehensive" review of its Irish brewing operation it proposed building a new brewery near the site of its St James's Gate plant in Dublin. The new site, due to commence brewing in 2013, would produce Guinness for export, and ales and lagers for the domestic Irish market.

The St James's Gate brewery would continue to produce the 'black stuff' for Ireland and the UK.

The £520m would be spent between 2009 and 2013 on renovating the St James's Gate facility, while surplus land around the brewery would be sold once the investment had been completed, raising a potential £400m.

The Guinness Store, described by Diageo as Ireland's "most popular tourist attraction", would continue to be based at St James's Gate.

Part of the new plans would also see the closure of two smaller breweries in Kilkenny and Dundalk and the sale of those sites.

The changes will result in a net loss of around 250 staff, the brewer said, plus a one-off restructuring cost of £120m which would be treated as an exceptional cost, predominantly in the financial year ending June 30 2008.

A Diageo spokesman said the group had started consultations with employees over the proposals, although he could not confirm how long talks would last.

Diageo chief executive Paul Walsh said: "Over the last 12 months we have conducted a rigorous review of our brewing operations in Ireland.

"It examined many options and I believe it has identified the right formula for the long-term success of our business in Ireland and for the continued global success of the Guinness brand.

"Our ambition is to combine the most modern brewing standards with almost 300 years of brewing tradition, craft and heritage."