Landmark Brewery to Sell
June 22, 2007 - Diageo has stoked speculation that it may move production of Guinness stout outside Dublin and sell its 250-year-old riverside brewery to take advantage of Ireland's property boom.
The company is "considering a number of important investment decisions on upgrading and renewing its brewing facilities in Ireland in the coming years," Diageo said in a statement today. "No decisions have been made or will be made until the assessment is completed," it said.
The St. James's Gate site, near the River Liffey, exports Guinness extract, the "essence'' of the drink, to more than 45 countries. The site, where production began in 1759, also makes all Guinness for Ireland and the U.K. since Diageo closed its Park Royal brewery in London in 2005.
The Sunday Independent newspaper said yesterday Diageo might move the brewery to a new site to the north of the city and sell the existing property for as much as 3 billion euros ($4 billion). Grainne Mackin, head of corporate communications at Diageo Ireland, called the report "pure speculation."
The 64-acre site, which also houses a seven- storey visitor center and bars, has grown 16-fold from the original property Arthur Guinness acquired on a 9,000-year lease. If sold, it would join the Irish Times newspaper headquarters and Dalymount Park football stadium among landmarks that have been bought to feed a decade-long property boom that has seen home prices and office rents in the capital quadruple.
The amount of Guinness sold in Europe fell 7 percent in Diageo's fiscal first half as demand waned in Ireland and the U.K.