Diageo, the owner of Guinness stout, is scaling back plans to build a €650m (£590m) brewery on the outskirts of Dublin and may scrap them altogether as global beer sales slump.

Diageo, which announced plans for the brewery last May as part of a restructuring of its historic St James’s Gate brewery in Dublin, said yesterday it was undertaking a 're-evaluation' of its brewing investments in Ireland. 'The world has changed,' the company said. 'We want to pause for breath.”'

The review is a blow for Ireland, which needs foreign investment to keep its economy afloat. Once revered as the 'Celtic Tiger', the country is now battling rising unemployment, a banking crisis and a spiralling budget deficit.

The move comes as brewers face falling sales as consumers cut back alcohol purchases in pubs, bars and supermarkets.

Financial Times, The Times