Guinness - History

History

Arthur Guinness started brewing ales from 1759 at the St. James's Gate Brewery, Dublin. On 31 December 1759 he signed a 9,000 year lease at £45 per annum for the unused brewery. Ten years later, on 19 May 1769, Guinness first exported his ale: he shipped six-and-a-half barrels to Great Britain.

"Stout" originally referred to a beer's strength, but eventually shifted meaning toward body and colour.

Arthur Guinness started selling the dark beer porter in 1778. The first Guinness beers to use the term were Single Stout and Double Stout in the 1840s. Throughout the bulk of its history, Guinness produced 'only three variations of a single beer type: porter or single stout, double or extra and foreign stout for export'.

Already one of the top-three British and Irish brewers, Guinness's sales soared from 350,000 barrels in 1868 to 779,000 barrels in 1876. In October 1886 Guinness became a public company, and was averaging sales of 1,138,000 barrels a year. This was despite the brewery's refusal to either advertise or offer its beer at a discount. Even though Guinness owned no public houses, the company was valued at £6 million and shares were twenty times oversubscribed, with share prices rising to a 60% premium on the first day of trading.

The breweries pioneered several quality control efforts. The brewery hired the statistician William Sealy Gosset in 1899, who achieved lasting fame under the pseudonym "Student" for techniques developed for Guinness, particularly Student's t-distribution and the even more commonly known Student's t-test.

By 1900 the brewery was operating unparalleled welfare schemes for its 5,000 employees. By 1907 the welfare schemes were costing the brewery £40,000 a year, which was one fifth of the total wages bill. The improvements were suggested and supervised by Sir John Lumsden. By 1914, Guinness was producing 2,652,000 barrels of beer a year, which was more than double that of its nearest competitor Bass, and was supplying more than 10% of the total UK beer market. In the 1930s, Guinness became the seventh largest company in the world. Before 1939, if a Guinness brewer wished to marry a Catholic, his resignation was requested. It had no qualms about selling drink to Catholics but it did everything it could to avoid employing them until the 1960s.

Guinness brewed their last porter in 1973. In the 1970s, following declining sales, the decision was taken to make Guinness Extra Stout more "drinkable". The gravity was subsequently reduced, and the brand was relaunched in 1981. Pale malt was used for the first time, and isomerized hop extract began to be used.

Guinness acquired the Distillers Company in 1986. This led to a scandal and criminal trial concerning the artificial inflation of the Guinness share price during the takeover bid engineered by the chairman, Ernest Saunders. A subsequent £5.2 million success fee paid to an American lawyer and Guinness director, Tom Ward, was the subject of the case Guinness plc v Saunders, in which the House of Lords declared that the payment had been invalid.

In the 1980s, as the IRA's bombing campaign spread to London and the rest of Britain, Guinness came close to scrapping the harp as its logo and denying its Irish heritage altogether.

The company merged with Grand Metropolitan in 1997 to form Diageo PLC. Due to controversy over the merger, the company was maintained as a separate entity within the Diageo and has retained the rights to the product and all associated trademarks of Guinness. The Guinness brewery in Park Royal, London closed in 2005. The production of all Guinness sold in the UK and Ireland was moved to St. James's Gate Brewery, Dublin.

Guinness has also been referred to as "the black stuff" and as a "Pint of Plain" – referred to in the famous refrain of Flann O'Brien's poem "The Workman's Friend": "A pint of plain is your only man." Guinness had a fleet of ships, barges and yachts. The Irish Sunday Independent newspaper reported on 17 June 2007 that Diageo intended to close the historic St James's Gate plant in Dublin and moving to a greenfield site on the outskirts of the city. This news caused some controversy when it was announced.

The following day, the Irish Daily Mail ran a follow-up story with a double page spread complete with images and a history of the plant since 1759. Initially, Diageo said that talk of a move was pure speculation but in the face of mounting speculation in the wake of the Sunday Independent article, the company confirmed that it is undertaking a "significant review of its operations". This review is largely due to the efforts of the company's ongoing drive to reduce the environmental impact of brewing at the St James's Gate plant.

On 23 November 2007, an article appeared in the Evening Herald, a Dublin newspaper, stating that Dublin City Council, in the best interests of the city of Dublin, had put forward a motion to prevent planning permission ever being granted for development of the site thus making it very difficult for Diageo to sell off the site for residential development.

On 9 May 2008, Diageo announced that the St James's Gate brewery will remain open and undergo renovations, but that breweries in Kilkenny and Dundalk will be closed by 2013 when a new larger brewery is opened near Dublin. The result will be a loss of roughly 250 jobs across the entire Diageo/Guinness workforce in Ireland. Two days later, the Sunday Independent again reported that Diageo chiefs had met with Tánaiste Mary Coughlan, the deputy leader of the Government of Ireland, about moving operations to Ireland from the UK to benefit from its lower corporation tax rates. Several UK firms have made the move to pay Ireland's 12.5 percent rate rather than the UK's 28 percent rate. Diageo released a statement to the London stock exchange denying the report. Despite the merger that created Diageo plc in 1997, Guinness has retained its right to the Guinness brand and associated trademarks and thus continues to trade under the traditional Guinness name despite trading under the corporation name Diageo for a brief period in 1997.