Two of Northern Ireland’s biggest drinks companies have seen their profits fall as costs rise.

Operating costs at Diageo Northern Ireland jumped to £73m (up 25%0 while Tennent’s NI saw costs rise by 18% to £48.2m.

According to accounts filed at Companies House for Belfast-based Diageo Northern Ireland, for the year ending June 2023, pre-tax profits dropped by 65% to £2.4m.

A year earlier, the company had reported a surge of over 50% in pre-tax profits, but rising costs have reversed its fortunes, despite turnover increasing by 6% to £180m.

Beer sales for the company, which boasts a portfolio including brands such as Guinness, Harp and Smithwick’s, were strong in the year to June 2023, rising from £114.5m to £122.5m.

Last year it was announced that a pint of Guinness could go up by as much as 40p after the firm announced price increases for customers.

Diageo NI, which also has Baileys in its portfolio, saw spirits sales grow from £54.7m to £57.5m during the year. Employee numbers were up from 119 to 131 during the year, but wage costs were down from £7m to £6.6m.

Diageo NI’s employees are based across its three sites in the province — a beer packaging plant in east Belfast, its corporate headquarters in Belfast city centre and the Baileys global supply facility in Mallusk.

Last year it was also announced that Diageo had won planning permission for a £26m extension of its Baileys site.

The company said the approval would improve its logistics and warehousing facilities on the site, which produces over 60 million bottles of Baileys a year for export to 150 countries.

Diageo NI also revealed it would pump £24.5m into the regeneration of its east Belfast packaging facility.

The firm, which is overseen by Diageo Ireland managing director Barry O’Sullivan, declared a dividend of £6.5m during the year.

But directors’ remuneration, including pension contributions took a hit, dropping from £455,000 to £212,000.

Meanwhile, the salary of the highest paid director was also down from £310,000 to £126,000.

Tennent’s NI, which is behind the manufacturing and distribution of Tennent’s, Heverlee, Clonmel and Magners Irish Cider, was also affected by rising costs.

Despite turnover increasing by 16% to £61.5m during the year ending February 2023, the company saw pre-tax profits dip by 38% to £3.2m.

According to the accounts, which have just been published at Companies House, operating costs rose by 18% to £48.2m during the year.

But the business saw turnover from sales of beer and cider increase from £52.6m to £61.5m.

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Pouring two-thirds of the pint and leaving it to rest for 60 to 80 seconds has become regular practice for any barman worth their salt – with Guinness insisting it is necessary to achieve the ‘perfect head height’ and ‘balanced flavour profile’.

As the company itself says: ‘Good things come to those who wait.’

However an Irish barman based in the UK has ignited an almighty row by insisting the double pour is simply a marketing ploy and does not affect the stout’s quality or taste.

Nate Brown, owner of Paloma Café, Soda & Friends and Nebula cocktail bars in London, dismissed the practice in an article entitled ‘there’s no such thing as the perfect Guinness pour’.

This isn’t done for the beer’s sake; it was practice in the Guinness brewery to speed up serving the masses at home time — the brand has always had the savviest of marketing departments,’ he wrote in FT Magazine.

Diageo, Guinness’ parent company, quickly hit out against the claim that the two-part pour is simply a marketing stunt.

And Oisin Rogers, co-owner of the Devonshire in Soho, described Mr Brown’s assertion as ‘absolute horses***’.

He tweeted: “It’s impossible to get a correctly presented pint of Guinness in one pour because the meniscus is negative. Therefore a dimple rather than a dome. Also he’d texture completely disappointing leading to a far inferior drink. There.”

The row quickly bubbled over on social media as aficionados defended the two-part pour policy.

“Not true, has to be in 2 stages, too many times it’s been poured terribly in one go,” said David Lace, an Irishman living in the UK.

Meanwhile, Guinness obsessive Ben Allcock, who lives in Cheshire, suggested the two-part pour was part of a sacred ritual that “makes the pay off even sweeter”.

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Research conducted by Guinness and SustainabilityWorks revealed 58% of publicans surveyed have a basic knowledge of environmental issues. The online interactive toolkit, includes content, insights and recommended actions gathered from research and engagements with 342 publicans across the Island of Ireland.  

Diageo Ireland’s Managing Director Barry O’Sullivan said: ‘Pubs are central to Irish culture and communities across the country. All the big and small actions can make an impact, such as prioritising how we manage our waste, to the use of renewable energy sources. Sustainability is a challenge for everyone, and we hope this toolkit will help to support publicans as they continue to make more sustainable choices in the day to day running of their businesses. At Diageo we have stretching ESG commitments, and we want to support our customers on their own sustainability journey.’

John Byrne, co-owner of the Beach House in Greystones, Co Wicklow, said: ‘Our sector has been through huge challenges, and it’s been proven time and again that greater collaboration across the hospitality industry can benefit everyone. This toolkit is a simple and effective resource to help the Irish hospitality sector to make smart choices and implement sustainable ideas on our journey towards becoming more environmentally friendly.’

Aideen O’Hora, co-founder of SustainabilityWorks, said:‘At a time when environmental and social issues are impacting businesses of all sizes, we’re delighted to be working with Guinness to support the hospitality industry to become more sustainable. This toolkit contains accessible information with tangible outcomes that can help every pub implement change for both their business, their people and the planet.’

Each month, Guinness will upload content via its digital customer portal on the 10 pathways which includes Energy: Water; Waste; Transport; Local Sourcing; Community; Talent; Inclusion, Employee Wellbeing; and Customer Connections. The first pathway is Energy, which includes insights, advice and recommendations from training staff on energy saving, to energy audits and energy efficient equipment. This builds on the Guinness and Sustainable Energy Authority of Ireland partnership announced in December 2022 to create awareness of supports available to the hospitality industry, to reduce its energy bills and carbon footprint.

Publicans can visit Diageo One to register and receive monthly updates from The Sustainable Pub toolkit from Guinness (Please ensure your Diageo One location is set to IE. You will then be able to find the Sustainability Toolkit on the main menu)

Featured image: John Byrne, co-owner of the Beach House in Greystones, Co Wicklow

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The Mallusk site focuses on the original Baileys Irish Cream Liqueur and includes the production, bottling, labelling and storage of the product before distribution. Approval of the expansion plans will enable Diageo to improve its logistics and warehousing facilities. Work on the multi-year project is expected to commence in early 2024.

The facility at Mallusk produces over 60 million bottles of Baileys every year, sending them to 150 countries worldwide. It is one of three Diageo sites in Northern Ireland, which also includes a beer canning and packaging facility in East Belfast and its corporate headquarters located in Belfast city centre.

Lesley Allen, Operations Manager at Baileys Mallusk, said: “We are delighted with the Council’s decision to approve our plans to extend our site at Mallusk. The extension will support the storage, delivery and distribution of raw materials and finished goods and we are looking forward to the opportunities it will create for us.

“Baileys makes a considerable contribution to the local economy in Northern Ireland, and over 97% of our output is shipped around the world. We are confident that the planned extension will support Diageo’s wider growth strategy, building on the £40m investment we made in opening the site in 2003 and the ongoing investments to further develop the facility and the Baileys brand.”

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The Clover Group is creating the flagship venue at White’s Tavern, which has been completely transformed with an investment of £1.5m, with the addition of an authentic Irish beer hall and a new beer garden.

The exciting, unique and intimate new addition ‘White’s Store’, which will seat 30 people and serve only Guinness Draught and Guinness Zero adds to and completes the bar’s eclectic and vibrant offering.

Clover Group director Mark Beirne (pictured with Diageo’s Austin Guy)  said the new venture at White’s is a great fit for the Guinness brand with the bar’s history dating back to the 1700s complementing the rich heritage of the iconic global beer which has been over 260 years in the making.

Fronting onto the original Whites Tavern, the interior of the snug bar will be developed to be an atmospheric space to serve and enjoy the perfect pint.

‘White’s Store’ will reflect the quality, passion and innovation of the Guinness brand espousing a traditional style pub with familiar interior finishes including salvaged quarry tiles, a reclaimed bar and timber wall panelling.

The design, which is being developed by O’Donnell O’Neill Design Associates, will also have a contemporary component with installations from local artists, bespoke lighting and furniture.

Guinness Marketing Director, Alan McAleenan said: “We are delighted to partner with The Clover Group and see the first ever Guinness only bar come to Belfast.

“It’s our aim to create unique experiences where people can enjoy beautiful Guinness. White’s Store will offer the opportunity to enjoy delicious creamy pints and celebrate the heritage of our brand and the vibrancy of our future. I’m looking forward to having a pint there very soon.”

The Clover Groupoperates several venues in Belfast including The Jailhouse and Pug Uglies.

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