Drinks group Diageo has said the closure of two breweries in Dundalk and Kilkenny is essential if the group is to grow and guarantee its future.
This morning, the company said it would close breweries in Kilkenny and Dundalk after a review of its Irish businesses, but brewing of Guinness would continue at St James's Gate.
The company has said the jobs at Kilkenny and Dundalk will be lost in five years time. 50% of the St James's Gate facility in Dublin will also be sold off after a new brewery is developed on Thomas Street.
Production of Guinness at St James's Gate is to be cut by a third. Diageo executives said this morning that all pints of Guinness sold in Ireland will be produced at the Dublin city facility.
Guinness for export, as well as other ales and lagers, will be produced at a new facility which Diageo will develop at another Dublin location. The activities of the Kilkenny and Dundalk plants will transfer to this new site when it is built, leading to 250 job losses.
This morning Diageo chief executive Paul Walsh apologised to staff for the job losses and said losing colleagues was one of the most difficult aspects of the announcement. He said relocation opportunities were being offered to all staff affected. But Diageo has also acknowledged that there is little likelihood that people based in Kilkenny will want to move to Dublin.
The land to be sold off at St James's Gate will not reach the market until 2013. The land sold at that time in Dundalk, Kilkenny and Dublin is currently valued at around €500m.
Diageo says it will spend £520m (€657m) over the next five years on building the new brewery and renovating St James's Gate. Workers at Diageo's plants in Dublin, Waterford, Kilkenny and Dundalk were briefed by management this morning.
The general secretary of the Guinness Workers' Union said this morning's announcement was very bad news for workers. Sean Mackell said the GWU would be totally opposed to compulsory redundancies, adding that final arrangements for the plan would be determined only after discussions and negotiations with staff.
He said the company was trying to give the impression that the announcement was good news for Ireland when the opposite was the situation. Mr Mackell said Diageo was trying to give the impression it was investing money in the Irish economy when, in fact, it would make money on the sale of its two facilities.
800 people are employed in Diageo's brewing operation, which also manufactures Smithwicks, Kilkenny and Harp. The company employs a total of 2,500.
