Beer and dairy group Lion will cut 39 jobs from its James Boag brewery in Tasmania as part of an overhaul of its national beer production.

Lion, which is owned by Japanese giant Kirin Corporation, revealed the plans on Monday as it prepares to take away 20 million litres of annual beer production of some of its national brands from the Launceston plant and transfer it to other breweries on the mainland which are under-utilised. This will leave the James Boag brewery producing 36 million litres of beer annually from the plant by the end of September, 2016 when the transition is due to be completed.

Lion's James Boag brewery will have 39 jobs cut as 20 million litres of beer production gets transferred to the mainland from Tasmania. James Boag had a lavish marquee at the Spring Racing Carnival in Melbourne. Credit:Graham Denholm

Lion's managing director of beer, wine and spirits, James Brindley, said on Monday that Lion, which makes big-selling beers including XXXX Gold, Tooheys and West End, had extra room in its national network of production facilities.

"We have capacity in our national network and the Boag's brewery in its current format is also under-utilised," Mr Brindley said.