Diageo to expand Dublin brewery in 153 mln-euro deal

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British drinks giant Diageo Plc is to expand its Guinness brewery in central Dublin in a 153 million-euro ($194 million) investment to focus all its Irish brewing on one site, while plans to build a new super brewery remain on ice.

The London-based group said on Thursday the move will boost capacity by nearly 50 percent at its historic St James’s Gate brewery close to the river Liffey where Arthur Guinness moved his brewing operations in 1759 to brew his eponymous stout beer.

The expansion at the site in the Irish capital will be completed by the end of 2013, while the closure of Diageo’s two other smaller Irish breweries at Dundalk and Kilkenny in 2013 will lead to the likely loss of just under 100 jobs.

After months of talks with Dublin City Council, Diageo came up with its plan to expand brewing on the 55-acre site to boost annual capacity to 7 million hectolitres from the current 5 million. The site brews Guinness for all markets in Europe and also the United States along with other beers.

Diageo will retain a long-term option on land at Leixlip on the outskirts of Dublin, which is owned by descendants of the Guinness family, where it had planned to build a super brewery.

Back in 2008 Diageo announced its 650 million-euro plan to build this super brewery and sell part of the St James’s Gate site to developers, but these plans were later put on hold due to falling beer markets in Europe and the sharp fall in Dublin property prices.