Sarah Stack

Half of the world-famous home of Irish stout Guinness is to be sold off with 250 jobs axed at two of its sister breweries, under plans announced yesterday.

Drinks giant Diageo pledged to keep Dublin's iconic St James's Gate site open to protect the heritage of the Guinness brand amid a shake-up of Irish operations.

The firm said it would instead close its breweries at Kilkenny and Dundalk, losing more than half of the 450 brewing staff in the country.

A 650m (£515m) investment package will consolidate works at St James's Gate, where production will be cut by one-third. A new brew house, on the north of Thomas Street in Dublin, will supply one billion pints a year to the Irish and British markets.

Works at Kilkenny and Dundalk will also be transferred to a new brewing "centre of excellence" planned for 2013.

The Guinness Workers Union (GWU) said staff were shocked at the proposals.

Diageo chief executive Paul Walsh said they would support the long-term success and growth of Guinness around the world, as well as the other beers brewed for Ireland, the UK, and international markets.

"This will be the single biggest capital investment made by Diageo in its supply infrastructure since the company's creation 10 years ago and will enhance the cost-competitiveness of our global beer operations," he said.

The sight, sounds and smell of the 64-acre brewery near the River Liffey have been a part of Dublin's character since Arthur Guinness first started making his brew there in 1759. Some 100m (£79.3m) of the overall investment package will be poured into revamping the St James's Gate brewery and Guinness Storehouse, which attracts more than one million visitors a year.

Sean Mackell, general secretary of the GWU, said it totally opposed compulsory redundancies.

He said Dundalk and Kilkenny both employed 125 people directly, while the St James's Gate workforce of 190 would be cut to 65.

"People were expecting change, but the actual announcement has shocked people," said Mr Mackell.