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Guinness is just small beer

BACK in the cash-starved Fifties there was a widespread belief among a certain section of the Dublin public that the Government was suffering a national financial crisis so severe that a crestfallen Minister for Finance once woke to find that by the end of the week, he wouldn't have the money to pay the Gardai's wages.

So, this urban legend went on, the hapless politician could think of only one thing to do. He rang the St James's Gate headquarters of the Guinness Group and asked if the brewery was "good for a loan". Guinness, the rumour had it, quietly dipped into its vast coffers, the Guards got their pay and Government's blushes were spared.

The story - hopefully apocryphal and probably linked to the misinterpretation of a back-of-a-cigarette-pack calculation at the time that the excise duty being paid at that time by Guinness was enough to pay the wages of the Gardai - does suggest a special link with the giant brewing concern. Apart from confirming the obvious slack-jawed gullibility of a certain section of the Dublin public, the story showed the closeness between Guinness, the city and the economy.

No one would ever believe a story like that these days. Not because of any shortage of stupid people about, but because Guinness (the company, not the black stuff) has lost its place in the heart of the Irish people.

The country's once great economic icon is no longer regarded as Ireland's premier business achievement. And there are many who believe that the present owners of the company are happy to see it that way.

Labour rationalisations at Guinness over the past 15 years have been designed to offer the parent company the opportunity at some stage to remove the remaining brewing activity and relocate in other cheap labour centres.

Guinness and now Diageo have pledged themselves to continue to brew in Ireland but insiders, including many of the specialist liqueur publications, believe that the stage is being set for the eventual ceasing of Liffeyside beer manufacturing which has continued uninterrupted except for the very, very occasional strike since 1759.

The bonds that drew Guinness to the city and the State were varied and complex. Guinness was Ireland's first multinational. At one time the organisation employed nearly 5,000 people mostly in Dublin. Fifty years ago St James's Gate had more than 3,500 doing everything from barrel-making to the care of dray horses.

The famous paternalism it showed its employees with rock-solid pensions and medical care, not just for employees but also for their families, was also reflected in the 'good citizen' role Guinness established in relation to the rest of the economy.

When diversification was the fashion in the Seventies, Guinness joined in creating businesses that were reckoned to be "centres of excellence" in the so-called progressive sectors like beef processing and in tourism.

Guinness was proud to be as Irish as the harp on the bottle of stout. Then came Ernest Saunders. His usurpation of the board and his conversion of Guinness into a broad-based liquor combine with greater stress on Scotch whisky than black Irish beer, had no time for national pride and less for green sentiment.

Guinness embarked on the scaling down of brewing staffs in Dublin and elsewhere. But even then the old ethos was present. Severance packages were, and indeed continue to be, generous.

However the merger of Guinness and Grand Met in 1997 and the creation of Diageo killed off any chance that the old Guinness culture would last.

Most insiders say that the fact that there is still brewing of any sort in Dublin - this activity now employs scarcely more than 200 people - is not a reflection of sentiment but out of a fear that if the company pulled its roots, there would be at least a temporary Guinness boycott. At some stage, these same insiders say, the numbers will become so compelling that Diageo will take the risk.

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Diageo makes operating profits of some ?245m in Ireland but these figures comprise sales of Guinness beer products, wine and spirits and Baileys.

On the domestic market stout sales are falling and a sizeable portion of the revenues reported are "transfer pricing-affected" profits on the export of a Guinness "concentrate", a mysterious concoction used to brew Guinness in foreign parts.

Back in the days when some people believed that Guinness paid the wages of the gardai, if someone had said (a) that Guinness could be made from concentrate (b) that the main Guinness contribution to Irish public life in 2003 would be as the sponsor of the All-Ireland Hurling championship and (c) that the busiest part of its brewery in St James's Gate would be its visitors' centre, he would have been barred from the pub.

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