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03.2009

Massachusetts Beverage Business

archivedOnBeerReport

ARE the GATES CLOSING?

COULD THE FABLED GATES of the legendary St James’s Gate brewery be closing? Diageo the owner of Guinness stout, is scaling back its plans to construct an $855 million new brewery on the outskirts of Dublin and may do away with them altogether as beer sales throughout the world struggle. Diageo, which announced plans for the new brewery last May as part of a restructuring of its historic St James’s Gate brewery in Dublin, said it was undertaking a “re-evaluation” of its brewing investments in Ireland. The review is a blow for Ireland, which needs foreign investment to keep its economy afloat. After several years of growth and prosperity, the country is now battling rising unemployment, a banking crisis and a budget deficit. Options being considered include building a smaller brewery, delaying construction or eliminating the plans outright. Diageo, which also owns beer brands such as Harp and Kilkenny, brews a third of its beer in Ireland. The investment would have allowed Diageo to brew 2O percent more than it does currently in Dublin. At the time, Diageo said it expected beer exports to rise by some 8 to 1O percent each year. The new brewing center, which would have been the first large-scale brewery built in either Ireland or the UK in more than 2O years, was scheduled to be completed in 2O13.

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