Adjournment Debate - Brewery Closure.

Thursday, 12 February 2009

Dáil Eireann Debate
Vol. 674 No. 3

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Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  I thank the Minister of State, Deputy John McGuinness, for attending this important debate. As a Kilkenny man, I am glad the Minister of State will be able to give me the necessary information in the important context of saving as many jobs as possible in the Diageo review process that is taking place at present to ascertain the potential of retaining the production potential at Smithwick’s brewery in Kilkenny.

As the Minister of State is aware, this facility has existed for almost 300 years. There are currently 93 jobs at the facility and 153 contractors make a large part of their living from it. It makes a contribution to the local economy of between €10 million and €15 million. It could be a site with considerable development potential if the economic situation recovered to the level of some years ago. However, Diageo has decided to review the value of those sites and their development potential.

Some time ago, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, welcomed the announcement of the new site at Leixlip. There is now a unique opportunity to retain the facility in Kilkenny. The Leixlip idea was a good one according to the Minister, Deputy Coughlan. She was prepared to invest a substantial amount of money in assisting Diageo to build a new green field facility at grounds owned by Lord Iveagh. The facilities in Dundalk and Kilkenny were to be subsumed into that facility along with a part of St James’s Gate.

The current economic climate has brought about a rethink in Diageo concerning the value of those sites, especially in Kilkenny and Dundalk, but also the value of the site in Leixlip and the amount the company would be expected to pay for that site. This is an opportunity to revisit the issue. I welcome that Diageo is prepared to revisit the matter. I am aware that meetings have taken place between senior people in Diageo and workers to establish what can be done to reduce costs, to save as many jobs as possible and to allow the facility in Kilkenny to operate for longer than originally planned.

[713]I need not remind the Minister of State of the level of unemployment and job losses in Kilkenny. There is a very serious situation with some 10,144 people in Carlow-Kilkenny unemployed. It is critical that we retain as many manufacturing jobs as possible. There have been several blows in recent times, including job losses at NN Euroball and the announcement of 250 job losses at Glanbia. In addition to the contractor jobs, these 93 well paid jobs are important to the economic development of the city. The site is strategically placed adjacent to the central business district of Kilkenny city. I do not expect that the company will be able to replace the good employment which has been provided on the site for a considerable period of time. There is no planned retail activity or any master plan to replace lost jobs in the area.

However, there is an opportunity in this situation. I hope the Department will use its good offices in the context of the financial outlay that it was prepared to make to Diageo, through Enterprise Ireland, in the past year to consolidate the company’s operations in Leixlip. I also hope the Department will now be prepared to put the resources allocated at that time into Kilkenny to maintain jobs, rather that starting afresh at a green field site that may or may not come to profitable fruition in four or five year’s time.

Minister of State at the Department of Enterprise, Trade and Employment (Deputy John McGuinness): Information on John McGuinness  Zoom on John McGuinness  I thank the Deputy for raising this matter and I am pleased to be able to take it. I sympathise will all those who have lost jobs throughout the country and we must make an extra special effort to find replacement jobs and training where necessary. Deputy Hogan referred to the 10,400 unemployed people in the region and I sympathise with those people. We will work with them to improve matters. However, we must also acknowledge the positive developments in the economy, such as the creation of 100 jobs, which I announced last week, at the Kilkenny company

The Smithwicks brewery in Kilkenny was last discussed in the House on 15 May 2008. Diageo’s operations in Ireland have been under review for some time. On 9 May the company outlined its decision for the future of its plants at Dublin, Dundalk, Waterford and Kilkenny. While the company indicated there would be job losses, it said it would invest €650 million in the Guinness brewery at St. James’s Gate. A new brewery was due to be built on a suitable site close to Dublin and its location was to be Leixlip, County Kildare. It would use leading edge brewing technologies to deliver the best international standards in scale, efficiency, quality and environmental performance. On completion in 2013, it was to be the company’s biggest brewery and the largest in Ireland. The opening of the new brewery would be subject to planning permission from Kildare County Council. When the new brewery was commissioned, all production from the existing brewery in Kilkenny was to be transferred, resulting in the closure of the Kilkenny facility, as the Deputy stated.

As we are now aware, the current economic climate is considerably different from when Diageo announced its plan last May. The company recently announced that it was putting its plans for a new brewery on hold. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, has been and continues to be very active in communicating with Diageo as the situation unfolds. The Tánaiste was recently in London where she met Mr. Paul Walsh, chief executive of Diageo. While I am not in a position to say what is likely to happen at this stage with the Smithwicks brewery in Kilkenny in light of the changed circumstances, every effort will be made to secure the best possible outcome for Ireland as far as brewing is concerned.

I am aware of the circumstances of the 93 employees and the 150 contract workers involved. Smithwicks will celebrate 300 years in Kilkenny in 2010. I have met with the three unions [714]involved in the brewery. I have also met with the decision makers in Diageo and discussed the process now being undertaken by them. The unions concerned expressed the view that they have put forward a business plan for Smithwicks and the brewery site, which will be considered in the context of the evaluation. I assure the Deputy I take a keen interest in this matter and I realise he does also. I will keep in touch with those making the decisions in the coming months to establish what we can bring to bear on decision process and plans for the future development of the site. I realise we have previously disagreed on this matter, but I am prepared to further examine it with the local authority and Diageo and to have a local debate as to the best use for the site.

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