Diageo to announce Irish brewing plans

LONDON (Reuters) - Drinks giant Diageo (DGE.L) plans to announce its investment plans for brewing in Ireland on Friday, which reports say will include the closure of its historic St James's Gate Guinness brewery in Dublin.

The London-based group has arranged a news briefing on Friday morning where Chief Executive Paul Walsh will announce the outcome of its brewing investment assessment at the central Dublin brewery site near the River Liffey.

Walsh is expected to outline a multi-million-euro plan to build a big new brewery on the edge of Dublin and close its three existing Irish breweries, including St James's Gate and those at Dundalk and Kilkenny, according to media reports.

The group is expected to sell most of the Dublin site for redevelopment, but retain the Guinness Storehouse, Ireland's leading visitor attraction on the St James's site, and enough land to continue producing flavour extract for Guinness beer.

The drinks company launched a review last June of its Irish brewing operations, following its move in 2004 to close its London Park Royal brewery and shift production to Dublin.

Brewing is likely to continue at St James's Gate for the next two to three years until a new brewery on a greenfield site in southwest Dublin is built, reports have said.

The brewery, which dates back to 1759, brews draught Guinness for Britain and Ireland and a number of export markets such as North America, and also exports Guinness flavour extract to 42 other Guinness breweries around the world.

Sales of Guinness, which gets its trademark dark colour from dark roasted barley, fell 7 percent in Ireland and 3 percent in Britain during Diageo's last financial year to end-June 2007, but worldwide sales grew 3 percent, helped by growth in Africa, especially Nigeria, and also in Asia.

(Reporting by David Jones; Editing by Braden Reddall)