Guinness calls time on Irish rail link

GUINNESS is to end its 150-year-old rolling transport contract with Irish Rail - resulting in the transfer of the transportation of 1.3 million kegs annually from rail to road.

The loss of the contract is part of a shake-up by the Dublin brewery as it moves to outsource its entire distribution and logistics business within 12 months.

Up to 11 jobs are under threat at Guinness centres in Claremorris and Cork but no further job losses are envisaged, a spokeswoman for the company said.

In the shakeout, new contracts have been agreed with some existing and some new suppliers, Guinness owner Diageo said in a statement.

Irish Rail will withdraw from the distribution contract over 6-12 months, starting in the north-west in July. Distribution for these areas, as well as Limerick, Galway Cork and Longford, will, in future, be undertaken by Shannon Transport & Logistics.

Last night a spokesman for Irish Rail said the deal went back to the middle of the 19th century.

"As long as the two have been around we have been in the business", he said.

Both sides refused to say what the contract was worth, citing confidentiality.

Volumes of draught beer transported by Irish Rail for Guinness have dipped by 20% in recent years while the road network has improved significantly, the spokesman said.

Rail use also involved significant extra handling because trucks had to be deployed to get the kegs to and form the trains and the better roads made rail use less attractive, he said.

Guinness played down the significance of the move pointing out that 2% of freight goes by rail in Ireland and the Guinness portion of that was just a fraction of 1% of the total rail freight figure.

The supply of Diageo's on-site logistics at St James's Gate in Dublin will transfer to Kammac Plc and Dublin keg distribution will be consolidated into a single contract with current supplier, Budget Transport.