Ireland: Diageo mulls options for Dublin's Guinness brewery

Diageo Plc said it was reviewing brewing operations in Ireland after local media reported the drinks giant may quit the Dublin city centre site where Guinness has been brewed for almost 250 years, Reuters reported June 18.

"The Diageo brewing business is considering a number of important investment decisions on upgrading and renewing its brewing facilities in Ireland in the coming years," the company said in a statement.

The review was at a "very early stage" and a report in the Sunday Independent newspaper that the company was preparing to move from its landmark St James's Gate site on the banks of Dublin's River Liffey was "speculation", Diageo added.

"No decisions have been made or will be made until the assessment is completed," the world's largest alcoholic drinks company said.

The site, where Arthur Guinness took out a 9,000 year lease on a disused brewery in 1759, has grown into what the brewer now describes as "a prime 64 acre (25 hectare) slice of Dublin".

The Sunday Independent reported the land could fetch as much as 3 billion euros ($4 billion) if Diageo implements plans to move production to a greenfield site on the outskirts of the Irish capital.

Dublin real estate has became some of the costliest in the world after the Celtic Tiger boom of the 1990s transformed once impoverished Ireland into one of Europe's wealthiest nations.

But the boom has also dented sales of Ireland's favourite tipple as tastes change and appetites grow for wine, spirits, cider and imported beer.

Sales of Guinness, which gets its trademark dark colour from roasted barley, fell about 7 percent in Ireland in the final six months of last year.

David Gosnell, Diageo's managing director for global supply, said it would be 2008 at least before the company completes its review. "Diageo fully recognises the huge importance of St James's Gate in the history of Guinness and Dublin city and this important aspect of our brand and heritage will be fully embraced in the assessment," he said.

Guinness is brewed at almost 50 sites around the world but some 500 million litres of the stout are still produced at St James's Gate, which also houses a visitor centre, shop, bars and restaurants.

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