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GUINNESS PLC ANNOUNCES PRODUCTION STRATEGY FOR THE FUTURE IN SCOTLAND AND SPAIN

 LONDON, Jan. 12 /PRNewswire/ -- Guinness PLC has today announced a major reorganization and investment program which sets out its production strategy for Scotch whisky for the rest of the 1990's. It will substantially improve productivity and bring into balance output and likely demand over the next few years. A further program will provide for improved efficiency in the Group's brewing operations in Spain. Both programs will be implemented over the next three years.
 In making this announcement today, Tony Greener, chairman, Guinness PLC said, "Our commitment is to maintain a leadership position in the worldwide alcoholic drinks industry.
 The investment in new technology requires significant reorganization to achieve improved productivity, efficiency and profitability. Guinness is already one of Europe's strongest companies and these moves will further equip us to take advantage of the opportunities through the 1990's and beyond."
 The revenue expenditure, which amounts to 125 million, will be charged as exceptional operating costs in the 1992 accounts. Such costs include severance and early retirement, closure and reorganization, and asset write-downs where required.
 -- United Distillers has today announced a 100 million three year capital investment program in Scotch whisky production to concentrate all of its packaging operations on three sites in central Scotland, and re-align malt and grain distilling output to bring production levels into line with future expected demand. The announcement today identifies approximately 700 jobs to be phased out over a two year period. Every effort to minimize the impact of the employment reduction will be made through voluntary redundancy, early retirement and natural employment turnover. Packaging activities at Perth, Broxburn (near Edinburgh) and Leith will be transferred to Glasgow, Kilmarnock and Leven, while production will cease at one grain distillery (Cambus) and four malt distilleries (Pittyvaich, Balmenach, Rosebank and Bladnoch). United Distillers employs 5,000 people in Scotch whisky production.
 -- In response to changed conditions in the Spanish beer market, Guinness Brewing Worldwide (GBW) is planning to accelerate a further reorganization program at the Cruzcampo Group, Spain's leading brewer, to continue the process of bringing it up to GBW's standards of efficiency, quality and service. In particular, this plan includes provision for an additional program of early retirements.
 Commenting on the announcement, Tony Greener said, "This major reorganization and investment program reaffirms our commitment to modernize and upgrade our production facilities for Scotch whisky and to take the steps we believe are necessary to continue to lead the industry. It will bring the amount of capital investment in spirits production in Scotland to over 300 million since the acquisition of The Distillers Company by Guinness in 1986. We are announcing these moves as a complete package so that all of our employees are aware of our plans as far ahead as possible.
 "The highest levels of service, quality and productivity, achieved by ongoing capital expenditure, are an essential part of our commitment to build the franchise of our brands with consumers around the world through progressively increasing levels of marketing spend. This investment reflects confidence in our ability to take advantage of the many expanding Scotch whisky markets around the world.
 "The Spanish beer market has declined sharply in the second half of 1992 as a result of deteriorating economic conditions and ended the year five percent down. The short term prospects are not helped by a doubling of the rate of excise tax on beer in Spain from January 1993.
 "In response to these changed conditions we are bringing forward our plans to achieve additional productivity gains. Cruzcampo had regained its market share position by the end of 1992 and we remain confident of the long term prospects based on the company's brands and market strength.
 "This expenditure in Spain, supported by continuing capital investment, confirms our determination to enhance the position of the Cruzcampo Group as one of Europe's leading and most profitable national brewers.
 "These actions are a further demonstration of our long term commitment to our brands and our two core businesses of spirits and beer."
 -0- 1/12/93
 /CONTACT: Murray Loake of Guinness PLC, 011-44-71-486-0288, or Felicia Vonella of Dewe Rogerson Inc., 212-688-6840, for Guinness PLC/


CO: Guinness PLC ST: IN: FOD SU: RCN

SH -- NY074 -- 3935 01/12/93 10:42 EST
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Date:Jan 12, 1993
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