Brewing Facilities in Ireland

Diageo PLC
09 May 2008


                                                                      9 MAY 2008 
 

             DIAGEO TO CREATE WORLD-CLASS BREWING FACILITIES IN IRELAND


Following a comprehensive review of brewing operations in Ireland, Diageo has
today announced a proposal to create world-class brewing facilities in Ireland
over the next five years to support the growth and development of Diageo's
global beer business. 

The proposal includes:

•   The investment of £520 million between 2009 and 2013 to renovate the world 
    famous St. James's Gate brewery and to construct a new multi-product brewery 
    close to Dublin.
•   The closure of two smaller breweries at Kilkenny and Dundalk.
•   The release of surplus land, between 2013 and 2015, on parts of the St 
    James's Gate site as well as in Kilkenny and Dundalk, with an estimated 
    current value of approximately £400 million. 

The renovated St. James's Gate brewery will brew Guinness primarily for the
Irish and British markets and the new brewery will produce Guinness to meet
growing export demand and ales and lagers for the Irish market. These two
breweries will be designed to operate to the highest quality, operational and
environmental standards. When the new brewery is commissioned in five years
time, production from the existing breweries in Kilkenny and Dundalk will be
transferred, resulting in the closure of these facilities. The Guinness
Storehouse, Ireland's most popular tourist attraction, will continue to be based
at St. James's Gate. 

The new breweries will enhance the cost competitiveness of Diageo's global
brewing operations when the new facilities are commissioned in 2013. At that
point there will be a net reduction in staff of around 250. It is currently
estimated that one off cash costs relating to the restructuring of Diageo's
Irish brewing operations will total approximately £120 million. These will be
treated as an exceptional cost mainly in the fiscal year ending 30 June 2008. In
addition accelerated depreciation in respect of plant and equipment will be
provided as an exceptional item over the period of the closure of the
facilities. 


Paul Walsh, Chief Executive of Diageo plc, said:

'Over the last twelve months we have conducted a rigorous review of our brewing
operations in Ireland. It examined many options and I believe it has identified
the right formula for the long-term success of our business in Ireland and for
the continued global success of the Guinness brand. Our ambition is to combine
the most modern brewing standards with almost 300 years of brewing tradition,
craft and heritage.'
 

                                      - ends -


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Forward-looking statements

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